Treasury Sec. Scott Bessent: Putin, Chips, & Global Summits 8/19/25

0:00Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. The fate of Europe after meetings in Alaska and the White House. Can you be tough enough with a stick or carrot to get Putin to do what you want him to do? Key administration official, Treasury Secretary Scott Bessent. Alaska was a show of force by President Trump. It was kind of like inviting your uncontrollable neighbor to your house and showing them your gun case. Plus, House Secretary Besant views the government's new, to us, interest in private industry, like a possible 10 % stake in Intel. They're industries that we have to onshore.

0:46Industrial policy or national security. The last thing we want is a Huawei Belt and Road, where Huawei is selling chips to the rest of the world and U.S. technology is excluded. The big risks to Intel's newest stakeholders. Yeah, the government. Go on. No, the government does not have a great record of knowing how to run a private business. All that and much more this Tuesday, August 19th. Squawk Pod begins right now. Stand back to you by in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square.

1:30I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin.

1:36The Alaska summit reinforced my belief that while difficult pieces within reach, and I believe that in a very significant step, President Putin agreed that Russia would accept security guarantees for Ukraine. And this is one of the key points that we need to consider. And we're going to be considering that at the table also, So like who will do what, essentially. We're going to try and get a three-party meeting, maybe as soon as we can. And I have a feeling you and President Putin are going to work something out. Ultimately, this is a decision that can only be made by President Zelensky and by the people of Ukraine working also together in agreement with President Putin.

2:19And I just think that's very good things are going to come of it. So I hope we have a good meeting, and if we can have a good meeting, I'll set up a meeting with President Putin. In a certain period of time, not very far from now, a week or two weeks, we're gonna know whether or not we're gonna solve this, or is this horrible fighting gonna continue, we'll do our best to get it ended. And I believe you have two willing parties, and usually that's good news, but two willing parties that wanna make a deal. President Trump says he's begun making arrangements for a meeting between Ukraine's President Vladimir Zelensky and Russian President Vladimir Putin.

2:58In a post on True Social, Trump said that after Zelensky and Putin meet, then he'd want to have a trilateral meeting with the two men. He's been sort of waffling. I watched a lot of it yesterday. I think, you know, he said, yeah, if you want me to come, I'll come. I'll be there. But I sort of understand that if he goes to the initial meeting and it doesn't work, then it's going to be his fault. So if there is reason for him to go to the second meeting because they get along and maybe they have some common ground. Common ground is a weird term to lose. Well, you heard the hot mic up moment. Yeah, exactly.

3:37He thinks they're pals or something. It's, I don't know. watching the entire, the whole dynamic, we're going to have Scott Besson on, and he's the closest thing we can get to someone in the administration, but just to hear about the whole dynamic, we're sitting around with all these European leaders that we just, you know, have been sort of using a carrot stick for tariffs, so we're changing our whole, you know, the whole global trade ecosystem, we're changing, and they're not all probably happy about it, but everybody seemed to be getting along pretty well. It was kind of weird. I was the body language there, the pictures that they took with some of these things.

4:17It was like, wow, OK, if they could make progress on this, it'd be amazing. And Scott Bessent was in the room with Putin Friday. The journal has just a short op ed piece. But it just says that, you know, President Trump says, calls him Emmanuel. And then President Macron calls back to him, Mr. President. And that's sort of the I guess that's probably the way Trump would like it, but it's just a little, it is a little bit awkward, but he, it's in the United States and it's, you know, he's convened it and everything else. So he naturally would be thought of as the person like leading the discussion, but it's still, President Trump telling Zelensky that the U.S.

4:57would help guarantee Ukraine security in any deal to end the war between his country and Russia, though the extent of that guarantee is unclear. Before talks began, Russian foreign ministry ruled out the deployment of troops from NATO countries to help secure a peace deal. And Zelensky said that Ukraine offered to buy about$90 billion worth of U.S. weapons it's buying, not getting those. And there's also been some back and forth about exactly whether Putin agreed to a NATO, what would you call it, type, a NATO light, some type of security guarantee. Witkoff, the president I insist that he did.

5:36Others are saying that they find it hard to believe. Because that's the whole NATO thing. That's been the whole thing for Putin the whole time. He doesn't want NATO. He doesn't want anything close to NATO. Right. Well, and the reason is, does he want to keep going later? That's the whole question. Yeah. Yeah. And what's the end game? And can economic consequences? We're going to talk to Scott Besson. I'm going to admit, you know, security and economics are always linked. The Venn diagram for those two things, for the economy and whether you feel safe. And what, you know, they inform each other on policy.

6:16Can you be tough enough with a stick or a carrot to get Putin to do what you want him to do? I don't know if you can get him to do that. Well, you can get him to say. He thinks in a hundred year period. He's already said that. I think in 50, 60, 100 year and mother Russia. So what can you? And the problem is Putin has agreed to things in the past that he is completely violent. Exactly. On every one of these. So can you trust him with what he does? And that's the argument for having a NATO. I don't think there's any way you can just say, yes, we can trust him. No, you can't. He's broken every agreement he's ever.

6:47Trust but verify and keep the pressure on. Right. There's a way to pressure him. Which is why you need teeth. You probably understand it. What are you going to take him out of the banking system or something? What's that called? The SWIFT system? Yeah. No, the only thing. I think the only last pressure is a NATO-like thing. That's the thing. Right. I don't think economics work. That's the problem. We have troops all over the place, but we really have them in Ukraine. I mean, how long have we had troops in South Korea? Think about that. Meantime, SoftBank investing$2 billion in intel. This, of course, coming as the Trump administration reportedly considering taking a stake of 10 % in that struggling chipmaker.

7:24Christina Partinevles joins us now with the latest on all of it. Good morning. Good morning. I would say it's really just a lifeline from the private sector. SoftBank is going to pay about$23 a share. Intel tells me just last night it's a, quote, primary issuance of common stock. So that's 87 million new shares, giving SoftBank 2 % of the company. And shares are up over 5 % this morning because it's seen as a major vote of confidence in Intel, far outweighing any stock dilution concerns. The deal also builds SoftBank's broader U.S. expansion, including the Stargate data center project with the OpenAI in Oracle, and also a recent deal to buy Foxconn's EV plant in Ohio.

8:07Intel, like you said, has also had talks with the Trump administration about a deal that could make the U.S. government its biggest shareholder, a potential 10 % stake using Chips Act funding. Intel wouldn't comment on this possible government investment, but nonetheless, the rumors have been milling for quite some time. But Intel's founder unit won't break even until 2027, and that's where the problems come about, and they need external customers to generate billions of dollars in revenue. The company posted a$2.9 billion launch just last quarter. They laid off or are going to lay off 15 % of their workforce this year, and they threaten to halt advanced manufacturing processes without any external customers.

8:46As Wedbush notes, cash alone won't solve Intel's problems. The real game changer would be if the administration encourages customers to use Intel's capacity through policy initiatives, for example. So bottom line, Intel needs customers, not just capital, to turn around, guys. So here's the thing that I can't figure out about all of this. The only way that Intel is going to succeed to some degree is if it finds some genuinely new customers. And I don't know if you remember, but Gina Raimondo was reportedly back. This is in the Biden administration, was reportedly out pressing some of the big tech companies, Amazon, Apple, others, Google, to try to use Intel chips.

9:27That was sort of part. She became a salesman almost for Intel. And the truth was that the chips were never good enough. And so if you were Amazon or Google or Apple, you said, I don't want I don't want this. This is not the product that I want to I want to be buying. And so now, and maybe you could argue that this administration, President Trump, is either a better salesman or more forceful salesman. What happens when the administration calls Tim Cook up now and says, hey, I need you to buy, you know, 100 million chips from Intel. I know you want to buy them from, you know, NVIDIA or XYZ, but this is how you have to do it.

10:05Yeah, there's a difference between the Biden administration and the Trump administration in terms of the overhang for all of these companies. There's no major threat of, you know, anywhere between 25 to 300 percent tariffs on semiconductors. There's no threat of, hey, we're going to take 15 percent of your China sales revenue if you don't invest here in the United States. So I think that is there's a lot more pressure on these companies to invest in Intel. And now you have to see it as more of an R &D investment. So we're going to invest in Intel. We know that their most advanced chip manufacturing process is still not up to par.

10:38But hopefully it will help us in the long run when we need to build on American soil. And there's more of this sovereign push, you know, to create here. I guess you are right there. There's where I'm going with the question is, are they going to be forced to buy products they otherwise don't want to buy? It's one thing to force them to invest in a company that they don't want to invest in. That's one thing to actually buy product that you don't want to buy because you don't think it's good enough. actually then has ramifications on the customer? I don't think it would be a force to buy because then you would have had SoftBank say, we're going to use Intel right now to build out ARM's future chips, right?

11:16Because SoftBank's a major investor in ARM. ARM is said to be building their own individual CPU chips that would eventually compete against AMD and Intel. So I think it's more about investments at this point. I don't think that these companies are being pushed to actually use all of the products from Intel just yet. But they need to do something soon because the foundry business is going to flounder. Andrew, you're not giving government enough credit, I don't think. If the government invests and then it becomes involved with the running of the business, they could improve the quality of the chips.

11:56Imagine Amtrak and what they've been able to accomplish there or the air traffic controllers. system. Go on. No, the government does not have a great record of knowing how to run a private business. But the other thing, and it's pointed out, as I said in the journal, it helps when companies that are really bad are allowed to fail. And Intel, the reason they're laying off people and not using the chip money they got, there's no demand. This goes to the demand issue. Right. Why would they build more manufacturing facilities when no one is buying their chips? I believe the next part of the story is the jawboning, if not something worse, on companies to acquire the chips.

12:38What if it was a carrot instead of a stick? In other words, some type of inducing. Put this piece of crap in your stuff and we'll pay you instead of. By the way, then you infect the entire ecosystem. You infect the entire technology business. You're really getting me agitated. I go back and forth because I agree with everything you guys are saying on these points. You get back to this idea of we don't manufacture any chips here. We are completely reliant on Taiwan. If anything happens to Taiwan, we are hosed. It would be nice if SoftBank would keep putting in more money. Somebody else would be for it?

13:16Well, and then there's a separate issue, which is you have SoftBank putting money in right now. Part of their gamble is that the taxpayer in America is effectively going to subsidize their investment. Because of the 10%. Correct. So how should we feel about that? It opens up a lot of... Although when the government did put money in to the auto manufacturers during the financial crisis, it worked out very well. When you put the money in, you took it as a first investor who gets paid before anybody else. You got a preferred dividend on it. The government made money on all of those deals that they did during the financial crisis.

13:52Do we have a great auto sector now? No, but we made money. The point is the U.S. taxpayer did not lose money on those deals. But it did. I don't want to call it mediocre, but we still think that. And the government was heavily involved with all the banks' deals when things were falling. I don't disagree. As you know, I always thought we needed to rescue the banks. I wanted to rescue the automakers, too. And we did well. It also created a cultural backlash that I would argue to some degree has lasted even to this day. Yeah, against Wall Street. In a sort of massive way. And so I just wonder, does this then...

14:30And it also created the problem where investors think you don't have risk. And that has lasted to this day as well, that the government's always going to bail you out. You know what? You'd probably have to say it was good that the automaker... Because the quality has improved. We need that industry in the United States. It may not be, you know, you may still say Japanese or Korean automakers make. The quality's improved. I like my American quality. And I'm glad we have that industry. I would probably oddly have more time to pull a Fannie Mae, Freddie Mac situation on this whole game. Just take over the whole thing.

15:05Just take it. Just take it. Who's made? You want to know where the real money has been made for taxpayers? That's where the real money has been made. Fannie and Freddie. And there's massive pressure right now for the government to get out of those businesses from the investors who want to make. Correct. Correct. And so you went to get into this quasi. But then the question becomes, if you do that, will you be able to get loans for home mortgages because they subsidize such a huge part? That's a whole whole different ball of wax. NVIDIA reportedly working on a new chip for China that's more powerful than the H20 chip.

15:37It's already allowed to sell there. Reuters reporting that NVIDIA's new chip is based on its latest Blackwell architecture. Its design will likely deliver half the computing power contained in the company's more sophisticated B300 card. Now, sources telling Reuters the company wants to deliver samples to China for testing as early as next month. I imagine they have to send samples to the White House as well if they're going to be sending this stuff that direction. As they should, in a state-run... No, we're going to talk to Scott Besson about this. He should have some... You know, there are one-off situations.

16:15That's the problem I have. Like precious... Certain metals that we need, certain pharmaceutical constituents that we need. How do you do that? How do you make sure that next time that there's a problem, we have access to that? Chips, is there a place for industrial policy? We look at how quickly we get shut down by the rare earth metals. That's what I mean, yeah. Right. Cheese will be next. Coming up on Squawk Pod, have you heard enough about industrial policy yet? Nope, not us. We'll get into it with the Treasury Secretary. Scott Besant joins us, fresh off President Trump's meeting with Vladimir Putin and the following European summit at the White House.

16:54Are we unshoring the all-important chips industry? The single point of failure for the global economy is that 99 % of the advanced chips in the world are made in Taiwan. And for national security, we have to stop that single point of failure.

17:17This is Squawk Pod. Stand, Andrew, bye in five seconds. Four, three, two, one. Up in Andrew. Cue with Mike. You're watching Squawk Box on CNBC. I'm Andrew Ross Sorkin along with Joe Kernan and Becky Quick. Among today's top stories, SoftBank investing$2 billion in Intel. This is it tries to expand into the U.S. chip market and the move coming, as reports say, the Trump administration considering taking a 10 % stake in the struggling chip maker. That's going to be one of the topics we're going to discuss and tackle with Treasury Secretary Scott Bestin. One more thing. Yes, sir. Our friend Paul Hickey.

17:53Okay. He spoke capital. Yeah, what does he say? The federal government bailed everybody out with no strings attached during COVID. This is true. Why should the airlines have been treated any differently? You know what the total? It's hard to estimate all in what the bailout costs, adding up Trump and the CARES Act. And you know what the estimate is? I'm going$5 trillion. It's exactly what the estimate is. $4.5 to$5.2 trillion. So. Thank you. No. Well, you're welcome. But so the airlines, why do you have to pick on them so much? Everybody got bailed. Everybody got bailed. It wasn't their fault.

18:36It wasn't. No. Did you get a bailout? I didn't get a bailout. A lot of people did. A lot of people did. You could have for your varied and sundry businesses. You didn't get any PPI stuff? No. Is it PPI? What were those things called? P-P-something. Well. Remember all those? Well, the PPE. which is protective. Yeah, all those loans. PPP? But implied and guaranteed. Yeah, yeah. Three Ps.

19:07Joining us now, Treasury Secretary Scott Besson. You never know what you're going to hear before you come on, Mr. Treasury Secretary. It's always a pleasure to have you on. Good morning. Morning, Joe. We have talked in the past about whether you wear different hats. And you have always said, I wear the Treasury Secretary hat. But can we talk about the meeting yesterday with the European leaders and with President Zelensky? We haven't talked to an administration official yet. Is the reporting correct that there will likely be a bilateral meeting and then perhaps one that includes President Trump?

19:46Is that where things stand right now? Joe, let's go all the way back to Friday because I want to set the record straight on what went on in Alaska. Alaska was a show of force by President Trump. He invited President Putin to land that the Russians used to own. He displayed a huge amount of military hardware and then did a flyover. It was kind of like inviting your uncontrollable neighbor to your house and showing him your gun case. So then we the President Zelensky, we had a very good meeting with him in and his team in the Oval for about an hour and a half. And then we went met with the European leaders, who was an incredible group to have in the White House, all led by President Trump.

20:33And yes, the culmination of that was a call with President Putin. And my strong belief is that there will be a bilateral meeting between President Putin and President Zelensky. And that's the only way to end this conflict is to get the two sides talking. There's such a large intersection between security and economics. I would think that anything that we arrive at or that Ukraine arrives at with President Putin, to get him to, I don't know, for lack of a better term, to behave or to live up to all of the promises that are made, what type of economic considerations would be involved there, whether it's carrots or sticks?

21:24Because what we've talked about, he's made promises in the past that he hasn't lived up to. And there's a feeling that he's going to have to be induced to live up to whatever peace is arrived at. Well, I think the sense is that both sides are ready for this terrible conflict to end. And one of the ways to make President Putin want it to end is on the economic side. The Russian economy has 20 percent plus inflation. Right now, it is a war economy. I think more than 25 percent of the GDP is coming from the military buildup. So, you know, it's a very imbalanced economy. There are the frozen Russian assets.

22:09The runoff from those is now being used to finance the war. So there are a lot of pieces, moving pieces here, Joe. And then there's the Russian oil. we have planned to up the tariffs on India. These are secondary tariffs for buying the sanctioned Russian oil. It was interesting watching just the dynamic with the president and the different leaders from Europe that were there. We had just finished a lot of negotiations on tariffs and trade, and everybody seemed to be getting along. It was a little bit surreal, was it not? Joe, it was an optimistic, great day. Everybody's looking forward. The tariffs, the tariff discussions behind us.

23:02And that was very successful with Europe. And that's a very successful negotiation that President Trump completed in Scotland a few weeks ago. And now we can look forward to getting this terrible conflict solved. Treasury Secretary Besson, just in terms of already being done with those deals, I mean, there's still things that are popping up. The Financial Times had a story this week that pointed to the Digital Services Act and the Europeans really wanting to preserve the Digital Services Act and still be able to go after with that. And those are some of the non-tariff barriers that you all had been trying to negotiate and get rid of.

23:41It sounds like that is still there. Do you think this cooperation, this potential cooperation when it comes to Ukraine and Russia will end up affecting some of those economic talks that you've been having and will continue to have, I'm certain, for years to come? Well, Becky, what you're talking about is the digital services tax, the DST, which is an unfair tax, where some, not all European countries, tax our great Internet companies. And, you know, it's unfair because it's very specific to our companies. But, again, Europe very often has a collective action problem. The tariff negotiations were with the EU.

24:24You know, I can name a few. I believe it's Italy, France, Spain have the DST. Germany, Poland, others do not. So that's more at the national level than at the EU level. And the tariff negotiations were at the EU level. But will the Digital Services Act be something that this administration pursues actively? I guess it's question one and question two. Because of this cooperation that you see on areas like defense and national security, will that bleed into any of the conversations that are taking place on the economic side? I mean, I think it's key that you, as the Treasury Secretary, are involved in all of these conversations.

25:03Yeah, look, I think that the DST is very different than security guarantees for Ukraine. Everyone wants this conflict to stop, and we're not going to let the DST stand in between that. But we are pushing back. We're pushing back on countries around the world. And the problem with the European countries doing it is once the European countries do it, then they set a global standard. And countries like India, Turkey, Brazil think it's OK to do it. Mr. Secretary, we would never have enough time, obviously. And I just heard how much time we have left. So in terms of there's a letter being sent by some Democratic senators about security concerns with the H20 chip.