Power Lunch - Dow rallies as President Trump holds off on new tariffs 02/13/25

Episode Date: February 13, 2025

Stocks are higher as new inflation data and updates on President Trump’s tariff plans appeared to ease some concern around inflationary pressures and global trade tensions. We’ll cover all of the angles for you. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch alongside Kelly. I am Brian. All right, President Trump in the Oval Office. He is talking tariffs. We're going to talk about the potential impact of more tariffs on your money and the American economy. Plus, why bad news in Europe may be very good news here, especially when it come to energy. And we're seeing gains across the board right now, even as we've begun to get these headlines from the White House the past 15 minutes or so. The Dow has moved higher. A gain of a couple tens has turned into a half point rise. The NASDAQ is up nearly 1% right now. And we're watching meta to see if that winning streak can continue. It's only down a third of a percent right now. So it's possible it's been 18.

It could be 19 if it's up today. Intel also a big winner this week up 25 percent since Monday. Trump administration reportedly has reached out about possible collaborations. with Taiwan Semi and one of the past year's biggest winners soaring again today. Strong results. We're talking app 11. It's now up 900% over the past year. All right, so there is a lot to do, but let's begin with some potential big breaking

news, the past hour, although I guess we're not really sure. President Trump's speaking at the White House right now. He is talking about tariffs, but saying that he plans to put tariffs on nations, which basically tariff us, saying that he hopes those countries will cut or eliminate tariffs on American-made goods. Megan Casella hopefully can make sense of all this

and joins us from Washington. Brian, that's right. So these aren't taking effect today or not even in the near term. I'll get to that in a second. What the White House is doing here is they're looking at five different criteria and they'll be going on a country-by-country basis

coming up with a customized tariff rate for each one. They're looking at the tariff rates that they're putting on. on U.S. products, but they're also looking at taxes, including the VAT tax, non-tariff measures like regulation or subsidies, exchange rates, any attempts to devalue the currency, as well as any other policies that the USTR, the trade representative, determines is an unfair limitation. So quite broadly written here in terms of making these country-by-country customized tariff rates as we move forward.

But a little bit of a lead time as they come up with what exactly they want to see in terms of rate by which country. But Commerce Secretary Howard Lutnik did just tell reporters in the O. office that he expects and hopes that this will all be done by April 1, April 1st, ready to go then. I'll also say, guys, that the White House says they expect every country to come to them to negotiate. So there is room here, but it's not just tariff rates that other countries will need to lower.

They'll have to adjust these non-tariff measures as well. This also appears to replace that universal tariff idea from the campaign. They're now talking about this one. They like it better now because they can do it in this sort of customized way. And a couple other headlines just in the last couple of minutes from the press. He's saying that if consumers, he's asked if consumers can expect higher prices. He says not necessarily, maybe somewhat in the short term, but he expects jobs to go up as well. And he says that interest rates are going to be coming down.

So a few economic projections there from the president as he continues to talk with reporters about this reciprocal tariff plan, guys. All right. So there's a lot there, Megan. It sounds like there's no new tariffs being announced, but the Trump team is going to look at how other nations treat us, and if they deem them to sort of tax our goods, we may or may not tax them back. Am I kind of getting that right? That's exactly right. And you're keying on an important point that there's not a concrete action being taken today, but they are pretty emphatic on this

point. Even in the first term, we heard a lot about these types of issues. So now they're going to go country by country. They did say they might start with countries that have the largest trade deficits with the U.S., so think China, think Mexico as they do this. One White House official said that it could be a matter of weeks, a few months, until this is done. So we don't know exactly yet what the tariff rates will be. So you're right on that point. But they often name Brazil and India, and we may hear about more of this later today when the Indian Prime Minister is at the White House.

They also talk about China, of course, the most in the EU as well, in these non-tariff barriers. So they're sort of putting countries on warning, I would say, as they try to get some negotiations done and see what concessions countries might offer. Yeah, and we'll be watching for the back and forth on all of that. Megan, thanks. Appreciate it. Megan Casella. President has also been pushing for lower interest rates, saying they should go hand in hand with tariffs, but our next guest says it's not the time to cut. The Fed should keep rates on hold, she says.

We've got good growth, healthy labor markets, sticky inflation. Loretta Mester is here with us. She's the former Cleveland Fed president, currently adjunct professor of finance at Wharton, School of Business and a CMC contributor. It's great to see you. Welcome. Thank you very much for having me. So the big development this week, CPI, is that why we're on hold? And it was interesting to have the president say lower rates should go hand in hand with tariffs,

when, if anything, tariffs probably make lower rates less likely, or maybe they don't. Yeah, I mean, the CPI was just another confirmation that the progress on inflation coming down is stalled since the fall of last year. And so, you know, given that the economy still is healthy in terms of the labor market and growth, We saw that the economy grew at 2.5% last year. That's really good. It was 3% the year before. That's very healthy growth.

It's above trend. There's no reason for the Fed to be moving rates down at this point. They need to hold and wait and see how things develop. And so it was another confirmation that we haven't seen the progress that we'd like to see on inflation. It doesn't mean that inflation won't start to move down later this year. No, you can't say that yet. We saw higher inflation numbers at the beginning of last year. as well, and then inflation began moving back down.

But I would say at this point, there's no compelling reason to cut rates and holding this seems to be the best play here. Should they have cut rates? I mean, they did cut rates by 1% last year. Yeah, I mean, rates were very high and very restrictive at that point, and we had seen a lot of progress on inflation, so they were bringing them down. Now, it's debatable how restrictive the current interest rates are, but I would say most economists say they're still somewhat restrictive, and we'll have to just,

hold here for a while to see what's coming. There's a lot of uncertainty, as we've talked about, coming out of the... Well, the bond market, when I only... Listen, the Fed's done what they've done. So, what do you always say? You get what you get, and you don't get... Don't get upset. Well, the bond market got upset. Well, the bond market is reacting to a lot of things, right?

The bond market yields went up partly because they were more euphoric about what was the outcome for growth coming, right? So there was a real play. There was a term premium in there, worried about the deficit, right? And then there was what the Fed was doing. So I don't think you can point to the Fed as being driving that 10-year Treasury market. I don't know if we have this chart ready, but it would be a chart of monthly job growth over the past 12 months. And just this eerie thing happened where job growth started to slow throughout the summer. We had that yen-carry trade things, you know, setting markets lower in August. And it looked

like the economy's rolling over, the markets are rolling over, and that's why they cut 50. Okay, fine. Then immediately jobs started to pick up again. And so those facts changed. I'm trying to figure if you're the Fed, what do you do about that? I mean, this is such an unusual cycle. Well, you do know that when the data comes in, you know, that they can be revised. And so that's why the Fed always says, look, we don't move on one data point. We're going to look at what the data is telling us. And you're exactly right. I think the reason they started cutting in September was because, right, they hadn't made all that progress. in inflation. The size of the cut, whether 25 versus 50, I think, was driven by their concerns about some of that, what was going in the labor market and some of those reports. Now, you're right, that got revised away. But the labor market, but it's a moderate. Yeah, but it is a moderation from what we saw, you know, earlier last year in terms of the growth rate in employment. So I would say that it's still a healthy labor market. It's still, you know, in balance,

supply and demand, which is what you want. You don't want overly tight labor market. or, you know, overly loose labor markets. So it's an imbalance. But that's something that they're going to be looking at going forward, partly because of the uncertainty around what some of the forthcoming policies will be. They're going to have to be very attuned to that. You're in Ohioan. Where are you from originally?

Baltimore. Baltimore, Maryland. You got to say without the tea. Ballmore. Charmed City. Yeah, exactly. Right? Yeah.

If I went down to Towson and I started, And I went into like a bar and I just started talking about how the Fed data says this. I'm going to get punched in the face. I believe that. Right? Yeah. Because if I tell the dock workers that may hang out in Ballmore what their life is like based on Federal Reserve data, they're going to remove me from the premises in an unfriendly manner.

Okay. Does the Fed recognize that sometimes the data doesn't match up with real life? Well, I think one thing that's very clear is that you can't go out and say inflation is down when you still have the prices at the levels moving up. Yeah. I think there's a misunderstanding of sort of like what does that mean, right? Inflation can come down, but the price level doesn't have to come down. And unless your wages have gone up enough to cover those higher prices, you're hurting.

And I think that's a key thing because if you look at the CPI, the level of the CPI and the level of wages, that gap hasn't closed, right? Prices are higher than what you could afford back in 2019. You never caught up. And so that gap hasn't closed. And I think that's part of why people are very, you know, not satisfied with where inflation is. It doesn't matter that it's come down from 7% to 200%. No, they don't care because this goes to the article you sent last night, and I retweeted out with the credit to you, that it was a political article, basically, Loretta, basically the Federal Reserve and the White House kind of found out that the way people feel isn't reflected in the data. And I'm summarized in the article that's on our social feeds.

But the idea that, yeah, if you want to tell people inflation's coming down because their burger went from 12 to 18 and now it's, quote, only 19, they're still kicked off that the burger's 19, not 12. But remember, the Fed's mandate, right, is price stability, right, and full employment or we're maxed. employment, right? So they can set their interest rate to work against inflation, right? They don't target a price level. So this is, but this is, I think, significant in the sense that, right, you have to consider where people are and explain where you want the economy to be going. Eventually, wages will catch up and that gap will close, because we've seen that in the past. But at this point, it hasn't. When you go into the grocery store or go to the gas pump, with prices at the level they are.

That's why terrorists are going to be a problem, because terrorists are going to lead to higher prices. We don't know how much, because it really depends on whether the producer eats some of that tariff in their margins, not passing them on at higher prices to consumer. But in general, terrorists will raise prices. Whether it's continuous inflation, we can't tell you that yet. But a series of tariffs like we're hearing and reciprocal tariffs going back and forth could be of inflation problem. That's why it adds

upside risks of inflation that the Fed's going to have to consider. Loretta Mester from Ballmore and the Cleveland Fed. Thank you so much for joining us today. We're going to do our show live from a food line in Hagerstown, Maryland. Right. Thank you for getting that. So the Fed's rate cutting cycle is over

for now unless. And after the break, we're going to dive into what unless might look like. All right, welcome back. Stocks and your investment dollars, as you can see, or just listen to me. They're higher again. The macro market is up. And now the S&P is up just under 4% for the year. But your next guest says you may want to stop trying to guess what's going to

happen and just get on board of some stocks that he likes regardless of what happens. Let's talk about it all with Bryant, Van Kronkite. He is Senior Equity Portfolio Manager at All Spring Global Investments. We've got your picks. But, you know, maybe comment, Brian, on what you heard Laura Mesterner just said, I love the fact she came in. She was brutally honest. And I appreciated the fact that she kind of said, listen, the Fed maybe whiffed a little bit. Yeah, I think she's absolutely right. I think number one, right now, I think the Fed can just be on hold. They don't need to do anything. They accomplish their mission out of the gate. And today, you see unemployment at very low numbers and stable. Inflation is moving modestly higher, but not an alarming way. And so I

think the Fed's cutting cycle is over unless something breaks. And if something breaks, it's usually very bad for investors in the short term, but the Fed will then step back in and do their job at that point in time. But if you're on the Fed board right now, why get involved? Just step back and say, I don't know what's going to happen in regards to tariffs, immigration policies. I'm just going to step back, not cause any trouble, and just be here to pick the pieces if something does break in the future. As a fund manager, your job is to take the current and future economics, situation, plugged in into your models, then come up with some stocks. So you like, let's say a Canadian Pacific, for example, does it matter what the Federal Reserve does vis-a-vis your investment

in a Canadian-slash-American railroad? Well, the Federal Reserve always matters, right? They always have the ability to drive markets and the economy. But in a moment in time that we have today, where I think they're going to be less involved than they were over the past 12 to 24 months, I think you want to own businesses that have financial freedom. Financial freedom is something we measure through the company's balance sheets, and it's the ability for them to play offense with their capital allocation decisions. For example, Canadian Pacific, the railway made a big acquisition of Canadians of Kansas City Southern a few years ago. That acquisition allows them to be the only railway that controls transnational from Mexico through the U.S. to Canada, which is a really

important rail to have. Now, what's great there is that the benefits of that are still way ahead of us. No matter what happens with the economy, we're going to see volume increase. We're going to see them gain a length of haul. We're going to see margins expand through that acquisition. And that's going to be really good for us as investors. Now, we might get tail wins or headwinds, but they're on their own doing a great job. I was just going to say it's an interesting name to pick a railroad in the midst of all this. Do you think all of this tariff talk is creating other dislocations that could be opportunities for investors in this market? Well, I think it certainly is. Obviously, we see the market reacting very, very quickly to headlines that come across with tariffs.

And so anything tied to Mexico or Canada is going to be an important one. There's other areas though where I think we can kind of ignore some of that. I don't want to go into the storm right now with tariffs. I want to try and find companies that are going to avoid that. So if you look somewhere on the inside, for example, look at health care and in LabCorp, for example. U.S. focused business. Certainly we're seeing health care tape bombs everywhere right now with regulatory issues, pricing issues. But the labs are doing a service that is incredibly valuable and is very low cost of the total cost of care.

And LabCorp today is using their balance sheet for acquisitions, rolling up. but a fragmented industry, which is an incredibly powerful tool to grow their top line, but also to see margin expansion as they do it. So I want to avoid the news and avoid the noises if I can, and only go in places where I think that risk is priced in, like a CP. Otherwise, avoid it and I want to make a Lab Corp today. All right, Brian, we're going to leave it there. We've got some breaking news.

Welcome back anytime LabCorp, Canadian Pacific, Brian Van Kronkite. Bryant, thank you. We got a lot more news coming out of the president's comments in the Oval Office, touching on everything from TikTok. to the Ukraine. Megan Cassella with more. Kelly, quite a long confab with reporters in the Oval Office, I would say right now. A few more topics to hit here. The president was just talking about TikTok, as you mentioned.

He said the TikTok deadline could be extended. He says he hopes to make a deal on TikTok and that he will make it worthwhile for China to approve a TikTok sale. He's also alluding to chip tariffs. It sounds like here saying that Taiwan took our chip business away and we want that business back. He has threatened tariffs on chips. We don't have any further details on that at this time. He also said he is not concerned about countries shifting their business to China. And then one last point, given that the Indian Prime Minister Narendra Modi is planning to be at the White House later today.

Trump also said that Elon Musk met with Prime Minister Modi earlier today. And Trump said he assumes that Musk wants to do business in India. So no further details on that, but more to look forward to as we await the full tape playback from this Oval Office spray, guys. Megan, thank you very much, Megan Cassella. and still to come the energy behind the AI boom. We'll check the charts for some key nameset to cash in and market navigator next. All right, well, this morning we thought that the president might slap some huge new tariffs on a bunch of stuff. That's not happened.

I mean, it could happen, as Megynette is talking about. Maybe April 1st we get some of these sort of tit-for-tat tariffs, not the case. And so the market is reacting in a positive way. The Dow, SMB, and NASDAQ all higher than NASDAQ is out. by 1%. You got some health care names like Ventas doing very well. CVS. By the way, Intel doing well. Supermicro also doing well. And Supermicro is a great role in for your next guest in market navigator. Because as AI and data centers boom demand for the electricity to power those data centers also booming, and that could mean opportunity for you. Joining us not to make sense of it all.

is Tony Wang. He is portfolio manager for science and technology equity fund at T-R-R-Price. All right, Tony, good to see you. Listen, a lot going on with the market Stargate, Deep Seek, Nvidia, whatever. What do you make of everything that's going on and who may win regardless of what happens? Yeah, I think that's a great question. As you mentioned, there's a lot going on in the news. And so I think what we saw was a big announcement on Stargate to continue building large amounts of AI infrastructure in the U.S. and then followed by DeepSeek where there's largely a much more efficient model, though it is more slim down, that kind of is able to use kind of the GPUs a lot more efficiently. And so I think that to me that this is a continuation

of the technology evolution where cost do come down and as a result, adoption increases. I think that this earning season, we talked to Palantir as well at HubSpot. And you're seeing that large language models are becoming a lot more economically viable. And so when you see that, you generally see more adoption, the AI skews of at the app layer improve. And I think that, you know, there's a good amount of benefit that can accrue to also the companies that sell kind of the picks and shovels or the AI chips in this case. And then, you know, on that list is probably like Nvidia.

So, Tony, you and your team have had the chance to dive a little more deeper into deep seek. I mean, Deirdreboza talked about it on this network, I think on the 24th or whatever of January, it hit over the weekend. Monday, the market panic sold everything. Maybe you didn't, but the market overall sold everything. A lot of those names have now come back to even higher levels that they were prior to the deep seek news. What have we learned? What have you learned about it to sort of ease our concerns? Yeah. Well, I think that what you've seen is that, you know, this is more of an evolutionary than revolutionary model. And as a result, I think that this continues to increase the adoption.

But it doesn't mean that the U.S. tech players are going to essentially not continue to spend and fast forward their efforts. And so I think that everybody's going to adopt the deep seek model and what they've got. But then also, you know, the two things that you push on are essentially is compute. And the model, I think you're going to see continued buildouts. And you even saw China announce big buildouts after the, you know, Deep Seek got announced. So to me, I think that, you know, the race continues as a result is probably doesn't change, you know, too much. And that's probably why the stocks are up.

You know, at the same time, I think that you have to believe, you understand that the world is cyclical, spending is cyclical. And so you can't, you know, just expect that things that go up in a straight line. Sounds like Deep Seek may not be the big killer that we all thought it was. Tony Wang, really appreciate your views of Market Navigator. Thank you. And speaking of energy, we'll speak to the cheap executives of this data center stock that runs entirely on renewables and is up 74% in six months. We're back in a moment. Welcome back.

Overall market might be taking the president's 1 p.m. event in stride here, but a different story for the defense stocks, which are now turning lower after Trump and the Oval Office said that we could have an H-A-L-V-E defense spending, as in cut in half. He said we will work with China and Russia to cut spending. Shares of stocks like Lockheed Martin have turned lower down a couple fractions of a percent. We could cut defense spending in half is what he's saying. That's what he said. In half. When we get the tape playback, we'll have a clearer sense of what it is. These are not huge moves to the downside, but it has turned these stocks from rally into sell off territory.

Wow, pretty amazing. I mean, you think about defense spending just only continues to go up. Well, we might have to halve it if interest payments continue to be with it. are. To have and to hold, I support, or not. We'll try to get clarity on those headlines. In the meantime, let's talk about AI and energy because as AI and data centers boom, the amount of electricity needed to run them will also boom, but mostly that's here in America. And your next guest says that even with all the AI excitement, the world's energy demand may not grow as much as you think. Joining us now is Bank of America's securities, commodity, and derivative strategist, Francisco Blanche, always a must read. And we love having you on, Francisco.

How much of this might be all the well-publicized problems with Europe and their lack of growth? And yeah, to your point, a lot of it's really outside the U.S. U.S. energy demand is really booming. You're saying 2% power demand growth, which is astonishing when you look at the average the last 15 years has been roughly 0.2%. Places like Texas are seeing 3% demand growth. in the power sector. So, yeah, it's really more of a European story, to your point. And frankly, I think China's demand is also slowing down.

World GDP is going to be a little over 3% for the next few years. And with that means energy demand will be a little under 3%. The beta is a little lower than GDP. But it's fascinating because Europe is now potentially at the verge of some important changes. And remember, Europe has been really handicapped by this extremely high energy prices. And that may be starting to change sometime soon, right? Yeah, it could change. And I think the question is everybody's trying to figure out what does it all mean?

We know that energy demand is going to boom. We know that. We know that nuclear may come back online and maybe go to power some of these data centers, if not neighborhoods. But how do we make money from all of this? Well, I think one of the potential developments for the course to the next few months, if indeed we see a ceasefire and potentially a peace in Ukraine is potentially lower energy prices, right? And I think that will be true for lower European gas prices, in particular.

On a global scale, might be a little different. The U.S. will continue to export natural gas to the world. Tires might make things a little complicated. That's the challenge, I think. We are going to see potentially dislocations like the ones we saw last week. Francisco, yeah, I think, speaking of power, Francisco, I think the six hamsters running this feed have perished. We will get you back on again soon to get the feed going a little bit better. Francisco Blanche of Bank of America's securities. That's an important point that he's making. We know that Europe's been a total disaster. By the way, the hamsters are fine.

Let's move along to the mystery stock we tease, which is IREN. It operates data centers powered exclusively by renewable energy. Interesting play there. Optimized for Bitcoin mining and AI cloud services. They had results yesterday, beat on earnings and revenue. Stock is down fractionally today. One analyst we spoke to said it could be because Bitcoin's down. And Kappex spending concerns are there just as they've announced a big expansion to the data

center under construction in Texas. Iron has been on a massive run, up over 500% in the past two years. Let's bring in Dan Roberts. He's the co-founder and co-CEO. And Dan, most people think renewables aren't a great way to power data centers because you've got to have that perfect always-on energy. Welcome. Thanks for having me, Kelly. Oh, look, I think that's a bit of a misconception.

The reality with data centers is they are connected to utility grids that underwrite the intermittency from renewables. So every network is a melting pot of wind, solar, batteries, gas, etc. We're connected into the West Texas Ercock grid, 80% renewables, but continuous 24-7 power. Got it. So you're just connecting into a grid that is 80% renewables. Is that right? That's spot on. But it gets better because we've got an algorithm that automatically puts our computers to sleep when power prices go up.

So when the wind stops blowing, the sun stops shining. there's a weather event network outage, we're able to automatically put our computers to sleep and give that power back to the market, a bit like a demand side battery. So tell me why, you know, this is a prime opportunity for the explosion we're seeing an AI and obviously the continued demand for mining Bitcoin.

Well, it's all about power. It's the power story. And you'll see in hyperscale CAPEX forecast for AI growing 65, 70% year on year, over $300 billion in 2025. And there just isn't enough power to fuel this appetite for AI demands, let alone Bitcoin as well. If you assume just half of that $300 billion cap-ex is going into Nvidia GPUs, that's over 10 gigawatts of additional demand. Morgan Stanley are forecasting a shortfall of 36 gigawatts of power in the next three years.

and yes, we've secured 2.3 gigawatts of grid-connected power, but it's still not enough. Can you explain Dan and plain English or plain Australian, as it may be, to the audience? Because I've tried my best to do this, which is how power is different, right? Electricity is different in different places. And this idea, as cool and as revolutionary as it might be, probably would not work in Minnesota. it? Yeah, look, it's about large quantities of electricity, but it's not just enough to get the electricity. You've got to step it down to a usable level. And all of that takes time and many years of development, permits, planning, network study. If we take that 10 gigawatt number, that's equivalent

to 10 million washing machines. You can't go and plug washing machines into a high voltage transmission line. There's a very lengthy process you have to go through. in order to step down that power to a usable voltage, let alone procure all of the components, chillers, generators, steel, concrete, low voltage transformers. So there's a lot that needs to happen over a multi-year time horizon to actually deliver this power, deliver this data center capacity. And this is at the heart of the issue. It's the dislocation between the real world and the digital world.

we've got these digital world exponential trends, whether it's Bitcoin going from zero to a two trillion dollar market cap over the last 15 years, whether it's AI going from no one talking about it 18 months ago to being the latest biggest thing today. Right. These digital trends are unconstrained by the real world, but it takes time to deliver real world capacity to service these trends. Dan, what is going on in Abilene, Texas? I have not been down there.

So you guys are about 40 miles from Abilene, 30 miles from Sweetwater. Abilene, of course, is the site of this like 10 cluster Stargate massive supercomputer that they're building out. You're just a little bit away from. Why has this become the epicenter, as it seems like it is of these mega data and energy plants? What's going on? It's the power. It's where the power is. In Minnesota, you can't get gigawatts of power for data centers.

In Texas, it's an open network, it's an extremely large network, and the availability of power is there. So this is the story. Data centers are migrating out of metropolitan areas away from customers to the source of low-cost renewable energy, and that's West Texas. Low-cost, the source of low-cost, renewable energy is West Texas. It's Boone Pickens. It's lots of wind, lots of sun. Never would have thought that 50 years ago, and here we are. Dan, thanks so much. Appreciate you joining us today. Texas, the renewable. They've called it the Saudi Arabia of wind. Yes, they have.

And it's the renewable generation leader in the world. People don't think that. Great story. But it is. All right. The event in the Oval Office is over. Amon Jabrish was in there listening to the president. Amon, obviously, there seems to be a buffet of headlines to choose from.

So I'm just going to ask you to look at the menu and choose. Yeah, look, Brian, the president gave us an hour. in the Oval Office, small group of reporters in there as he signed this new presidential memorandum on reciprocal tariffs. The memorandum creates a timeline for the government to issue a report after that. The U.S. government will begin to implement these tariffs. I asked the president exactly, you know, what date do you expect tariffs might actually go into effect as a result of this? And he and Howard Lutnik said, you know, the earliest they see is April 1. And then after that they may be able to put tariffs into place on a case-by-case basis. So we'll wait for the

details of this rollout. But the president took a lot of questions. Like I said, for an hour in the Oval Office, Howard Lutnik was there, Peter Navarro was there. Kevin Hassett, the National Economic Council Director, was there as well. I also asked the president whether he'd spoken to any CEOs about these tariffs. He said he has been speaking to CEOs. He said all the CEOs that he's talked to love the tariffs and think that this is a tremendous idea for the U.S. And of course, we know there are other CEOs out there who've been very critical of this. So maybe those are not the same folks that the president is talking to. And he talked about a wide range of subjects, including TikTok.

He said that he does have a range of buyers that he's working on for TikTok. I asked him if he thinks that Xi Jinping would sell TikTok if it came down to it. If he's able to line up a buyer, would Xi Jinping even sell? The president said he believes that it's in China's best interest to sell TikTok and that he can convince Xi Jinping about that. He also talked about the upcoming, what he views as the upcoming end of the war in Ukraine. And he sketched out a vision for global peace, which was sweeping. He sees himself having direct conversations with Vladimir Putin soon in person and with Xi Jinping in person. He said it doesn't matter to him where those conversations happen.

He said he could even see a trilateral meeting of Xi Jinping, Donald Trump, and Vladimir Putin, all at once in one place. And what he wants as a result of that meeting is for all of those nations to commit to cutting their defense budgets in half. He'd like to see some significant defense savings. And he also said, frankly, the scale of the nuclear weaponry that the United States and these other countries have

is terrifying. And he said that he wants to do what he can to denuclearize the world. So we'll see how soon that vision can come to pass. And the president joked at one point. about tariffs. He said, you know, there are certain things, you know, family, God, that are important, but he said tariffs probably in the top four in his view. So the president was in a very expansive and good mood today. Took a lot of questions. You'll see a lot of those headlines coming out on the

tape. But for our purposes on tariffs, what he said was after April 1st, they do envision these tariffs going into effect, guys. So a few things. Number one, I mean, listen, whatever you think of it, it's nice that we're getting access the media to the president. We're hearing directly from the president, that I think should be whatever side of the table you're on, a win. Let's clarify this defense spending and half thing. We talked about the headlines. I think we're going to re-hear directly from the president a couple of moments, but did he say that the U.S. should cut its defense spending in half or the world should? No, he said each of these countries should. He said, why are we spending this much money on these

nuclear weapons that in theory, one would hope you never use, right? Because if you do use them, that's the end of the world. So why would we be spending an enormous amount of money on those weapons, right? So his view is if he can get these people into a room, and one of the reporters asked him, well, would you do that through the G20 or what global body would you do that through? And he said, I don't need bodies. It's just people. It's just myself, Vladimir Putin and Xi Jinping, I just talk directly to the people. He sees himself, Brian, as a dealmaker. who can do something historic and sweeping here in terms of denuclearizing the world. Now, a lot of politicians have tried that over the decade.

Sorry to jump in. I know time is tight. I want to be clear. So, yeah, so there was a headline effectively that the guidance we got to think Kelly was Trump says he could cut defense spending in half. That's very different than the president says if the world cuts its defense spending in half, we would go along with that because we should have fewer. Those are very different headlines.

When he talked about cutting defense spending in half, that's in context of this grand deal between the United States, China, and Russia. So he's saying, if they do it, we'll do it as well. I also asked him if he'd cut defense spending, if Elon finds waste there. Let's hear from the president.