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Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod, legendary investor Paul Tudor Jones. All these folks in AI are telling us we're creating something that's really dangerous. It's going to be really great too, but we're helpless to do anything about it.
Wall Street's well-known risk manager's warning on the risks of artificial intelligence and who has the power to harness it. President Trump has to get in the game. On his watch and on President Xi's watch, in the next four years, we'll probably have artificial superintelligence.
And Mattel CEO Inan Kreese joins us. The tariff impact on the maker of Barbie dolls. A significant part of toy creation happens in America. Design, development, product engineering, brand management, all happens in America. Making product, producing product in other countries allows us to create quality product at affordable price points.
Plus, the rest of today's news that got us squawking. Tariff fear hits a range of industries. The White House versus Harvard. And President Trump wants to make America film again. In fact, he named every single conservative in Hollywood. All three of them. It is Tuesday, May 6th. Squawk Pod begins right now. Stand back, you buy in 3, 2, 1, cue, please.
Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan, after a long winning streak for both the Dow and the S&P 500, where we'd seen up nine sessions in a row. Now, the market closed, Dow closed down yesterday, but it was much worse earlier on. It came all the way back. So it was only down 99 points by the end of the session. Looked like similar sessions we've seen recently where
It looks like it's going to be another one of those sessions, and then it isn't, but unable to hold on to gains. I think the latest move in the 10-year, I don't look at that as...
as disruptive and as worrying about U.S. assets and foreigners buying. I look at it more like, wow, the jobs number was good. Maybe the growth fears were overstated. But then you got a lot of these things. Even though we saw Jim Farley express almost some support for tariffs or at least support
saying that he understood what the administration was trying to do. But the company is now suspending 2025 financial guidance, saying it expects a $2.5 billion impact from the White House's new slate of tariffs. I don't think any of us would say we know exactly
Enough now that we can transition to a 10 percent or whatever the number is going to be. But I think they obviously the government wants us to to shift more parts of the U.S. So that's one thing. I think GM was three to four.
Ford said three or four billion. Ford's in the best position of the big three. Better than, yeah, more domestic production. Ford said it expects to offset $1 billion of that amount by taking actions like transporting vehicles from Mexico to Canada using special agreements so that they're not subject to U.S. tariffs. That I didn't understand at all. It's something with bonded. Yeah, it's like bonded trucks and you can. A lot of labor.
Whatever you do what you got to do. In terms of getting rid of the guidance, Ford cited near-term risks, including potential for supply chain disruption, higher U.S. tariffs and retaliatory tariffs from other countries. Now, for the first quarter, Ford beat analyst profit and revenue expectations. And excluding the tariff impact, Ford's CFO said the company was still on track to meet the
the 2025 earnings guidance that it gave back in February. Also, Barbie maker Mattel is withdrawing its 2025 financial guidance and saying that it's going to be increasing prices for some toys in the United States as tariffs raise their input costs.
The company is planning to make changes to its supply chain to try and reduce some of the Chinese sourced products in the U.S. Right now, Mattel imports about 20 percent of U.S. sold toys from China. It said it would cut that number to below 15 percent by the year 2026. We've got the CEO of Mattel, Inan Kreis, who's going to be joining us. And you may remember he was with us just March 4th. So it was exciting.
just over two months ago. At that point, he didn't think tariffs would be a big deal, but that was before we heard exactly how high the tariffs were. You've seen the stock drop pretty precipitously since then. I think for the year to date, it's down by about 9% or 10%, maybe right in the mid-range of that position. I think he thinks that
There shouldn't be any tariffs on toys. I think the president has said that maybe girls could do with fewer Barbie dolls. Unfortunately, they got caught up in the example that President Trump used. Fewer dolls. Fewer dolls. Instead of how many? Did he say instead of 100 or instead of 30, you could have two? Yeah. Somebody said, oh, the shelves are going to be open. Well, maybe the children will have two dolls instead of 30 dolls, you know?
And maybe the two dolls will cost a couple of bucks more than they would normally. That didn't go over well, though, sort of the asking for some... Let them eat cake. Yeah, exactly. No Barbie dolls for you.
This is interesting because when I was thinking this morning about whether you should tariff toys or not, the one thing I thought was, well, maybe I can see a tariff on toys. I'd rather not see one on pharmaceuticals so that people aren't paying more for drug prices. President Trump says that he will announce tariffs on pharmaceuticals within the next two weeks. The president making those comments as he signed health-related executive orders in the Oval Office.
One of those was a measure to try and incentivize more prescription drug manufacturing in the United States by directing the FDA to reduce the amount of time that it takes to approve American plants. That's good news. It would be nice to see some more production here. We know with supply chains what an issue it was during COVID to have so many things that we were sourcing in from China. You don't want to get caught in a position where you don't have drugs.
Eli Lilly, Johnson & Johnson, and AbbVie have recently pledged for more manufacturing investment in the United States. Yesterday, Bristol-Myers Squibb said that it will put $40 billion into the U.S. over the next five years. So good news to see additional manufacturing here. You just wonder what it will mean in the meantime for costs for sick people. And we've talked about it. It's like alphabet soup if you talk about how you make these complex products.
compounds and drugs. You start with some materials that aren't really made here, then it goes into some precursors that a lot of pharmaceuticals use, they're complex molecules. Those really aren't made here. So you can't just, it's a supply chain issue.
where you might be able to finally put the things together here, but... It's kind of like the car company. Right, there's going to be tariffs on the stuff that's coming in. Getting car parts from all over the place and putting it in. Right. And each drug, you know, and then you get some drugs, like...
What was that? I think it was Keytruda or one of those complex drugs that is made from Chinese hamster ovary cells. That's the only way you can make it? That's what it comes from? Yeah, it's made in cell culture. It's actually made biologically, not chemically. Or not mined. Right, and that's...
that and keytruda by the way is described as a miracle drug you're finding it for more and more uses um in some ways maybe way more effective than chemotherapy because it doesn't damage your body in the same ways right
The Education Department telling Harvard University it won't receive any more federal grants until it meets a series of demands from President Trump's administration. That action laid out in a letter to Harvard's president from Education Secretary Linda McMahon. The government is calling on Harvard to, in McMahon's words, return to merit-based admissions and hiring.
as well as ending unlawful programs that promote crude identity stereotypes, also reform the school's disciplinary process. Harvard has sued the Trump administration last month after the White House suspended more than $2 billion in federal funding to the school. In that lawsuit, Harvard said funding...
Cuts are going to put critical medical and scientific research in jeopardy. Interesting. Fascinating. Fascinating interview with a Harvard alumnus, well-known Bill Ackman. Talking about how illiquid the actual endowment is, how much debt that Harvard has taken on. So they're not in a position really to.
uh to act well they got it sounds like a political battle he was talking about penny pritzker being the the chair there right but he said look at all going back and forth there's a reason that the culture at harvard is the way it is right now yeah they've not we said you gotta get up to the problems and you gotta you gotta stop exclude you you don't have to hire certain people but you gotta stop excluding certain people and only
you know, a litmus test, basically, for who gets to walk around the campus. And I thought Ackman was fascinating yesterday. But he also said how important Harvard was to him, how at times it's been such an important key point for him. When asked about whether the tax exempt status should be revoked, he said yes.
And then we heard, well, it's a longer conversation. Longer conversation is just what you say when you've lost the argument. It's not just... I mean, it's just a complex situation. Scott Sperling, when he was here, and he's at the head of...
of Brigham, of the Boston General. Mass General. Mass General, right. Mass General School. Great Hospital. Right. And the cuts that he was so worried about in research and the things that they see there, that concerns me. I don't know that I want the administration telling them how to run everything, but Harvard has not reacted to the massive problems they've had on campus. They didn't do anything. They sent a totally incendiary letter back. And that was the first thing Ackman said was you don't start out
Just by saying, you know, go F yourself. I think it was an accidental letter that got sent to Harvard from the administration. It was their own negotiations and talking points. But there's a way to say, you know what, a lot of these things are, I mean, you saw those three presidents when Elise Stefanik, I mean, it was like beyond...
It was like the Twilight Zone listening to their answers on some of those things. And all they had to do was maybe respond with a little bit more conciliatory tone that, yeah, we're going to try and
And change something. And then do something. And then not just respond in a considerate tone, do something. And you can't put a cop at the corner of every building. It does come down to what is allowed there in terms of students not feeling safe. And you can't patrol. If the entire environment, every person you hire is a Marxist that is spouting from the river to the sea, then this is what you're going to get. That's where you're going to end up. ♪
OpenAI dialing back a significant restructuring plan, announcing its nonprofit parent will retain control of the company, even as it morphs into a public benefit corporation or PBC. OpenAI says that it made that decision after consulting with the attorneys general of California and Delaware. On a call with reporters, OpenAI CEO Sam Altman said that he was, quote, very happy that the nonprofit and the PBC will have the same mission.
OpenAI was co-founded by Elon Musk, and the Tesla CEO has been working to stop it from turning it into a for-profit company. In response to a question over that dispute with Musk, Altman told reporters that they were, quote, obsessed with Elon and said that OpenAI's mission had not changed.
In the meantime, Musk's lawyers saying the billionaire is still planning to proceed with his lawsuit against OpenAI. But part of that was in conjunction with the state laws. And I think the attorneys general, particularly in California and Delaware, you can't do it in a lot of different situations. And that clearly seems to be what happened here. It's like trying to figure out a...
It's a Rubik's Cube when I was reading exactly how it works with the public. And what's the, you know, for someone else to worry about.
California Governor Gavin Newsom signaling that he wants to work with the White House to try and bring more movie production to the United States. In a post on X, Newsom called for a federal partnership to make America film again, saying, POTUS, let's get it done. This follows President Trump's call Sunday evening for a 100 percent tariff on movies shown in the United States that were produced overseas.
Meantime, there are some details about a meeting that came before that announcement. A news release says that the actor John Voight and his manager Stephen Paul met with President Trump over the weekend at his Mar-a-Lago club in Florida, where they pitched a suite of ideas to boost domestic film and television production. Voight is one of the three stars that the president tapped to be special ambassadors to Hollywood.
Void and Paul say that their proposal included tariffs only in certain limited instances and that the news release doesn't otherwise mention tariffs. In the meantime, President Trump told reporters that he wants to help the U.S. film industry and would be meeting with Hollywood stakeholders. Mm-hmm.
In fact, he named every single conservative in Hollywood. All three of them. All three of them. Sly. Sylvester Stallone. Mel Gibson and John Voight. What about Dennis Quaid? I'm thinking. Randy Quaid. No, no. There's a couple of them. Yeah. Vince. Vince Vaughn. But that's very James Wood.
slightly yeah James would that recent movie that all the kids were throwing popcorn at the screens yeah my what is it mine mine minecraft why was that made in Canada
Because there's a lot of stuff in Toronto to get incentivized to do it. There's a lot of films that are being made in New Jersey now and in Atlanta. Jersey's okay. And Atlanta. Yeah. That California's having this slump, and it's not just Canada and other places that this is happening. It's just that there are a lot of other jurisdictions. Should I hope we stick at the Hollywood or should I? You want to see new content. I do. I want it in the United States, but Hollywood. Hollywood.
Hollywood's a great place, but I think it's nice to have stuff here in New Jersey. There's a lot of incentives that have been built up. They've kind of let it slip away by being so insufferable. Well, I don't think it's that. It's the incentives. It's not that, but it's hard for me. You know, I want to feel empathy. I talked to a filmmaker not long ago who said that in New Jersey, like, the tax credits are incredibly lucrative. They were looking for things to make here just because it was so lucrative. It'd be nice to bring it. Another good idea. Teas will be next.
Coming up next on SquawkPod, tariffs toll on toys. Mattel CEO Inan Kreese has a plan to redirect the Barbie and Hot Wheels supply chains. China represents less than 20% of our global production, and we plan to reduce that further to less than 15% by next year and less than 10% by 2027. But Kreese says other countries are key to keeping toys affordable. More from Mattel is right after this.
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You're watching Squawk Box on CNBC. I'm Andrew Ross Sorkin along with Joe Kernan and Becky Quick. Air traffic controllers temporarily lost communication with aircraft flying in and out of Newark Liberty Airport in New Jersey last week. An equipment malfunction caused an outage during which the air traffic controllers were unable to see, hear or talk to aircraft traveling to and from the airport.
Reports say that the outage lasts nearly 90 seconds. That incident has led to some controllers taking a leave under a federal rule that covers employees who experience traumatic events on the job. Since that incident, delays and cancellation of flights at Newark have been constant. We knew about this from last week, that there were problems happening on Monday at Newark Airport. The delays have continued. And now we're getting some of the details as to what was happening. You've even heard...
the transportation secretary talked a little bit about this and how this is very concerning and that some of the technology that they've been using is from 1990. Here we are 35 years later and none of this has been updated. In some cases at the FAA using floppy disks. I'd imagine this generation doesn't even know what these things are.
But it is setting us up on a lot of levels for some pretty concerning issues. Andrew and I have both been snarled at Newark Airport over the last week. Terrible delays. Terrible delays. Yeah, I had four or five hour delays on Thursday last week, delays yesterday coming in, and you got in very, very late. But what was more concerning to me is not the delays, but the concern...
Tom Costello from NBC said someone tell him that you should avoid Newark at all costs, that it's not safe with some of the issues coming in and out. So trying to find out to make sure that we are getting our arms around this, trying to do this quickly. It's the lead editorial in The Wall Street Journal today.
And they just talk about how some of these issues, the upgrades of the system, are taking decades to try and get things up and running. It's a problem we've known about for a long time, but it seems to be hitting the forefront and could be in for a very long summer of delays and concerns about the safety there, too.
It just means it's got to go out of LaGuardia and JFK. But the problem is so much more traffic going into there, those airports will also feel the strains from it. I know. I know. I was just looking at a couple of flights I've got to take, and it's going to be complicated this summer.
Barbie and Hot Wheels maker Mattel withdrawing its financial guidance and saying that it plans to increase prices for some products in the United States because of tariffs. The company also talking about accelerating moving some of its production out of China. Since the tariffs were announced on April 2nd, Mattel's stock is down by about 19 percent.
The tariffs were steeper than most people, just about everybody was anticipating with some of this. And you've seen the reaction in Mattel shares and in other companies as well. Joining us right now to talk more about what to expect is Inan Kryes. He's the chairman and the CEO of Mattel. And Inan, thank you for being with us.
We are looking at lots of moving pieces. You had your quarterly results, but I think people are trying to figure out what comes next because the tariffs were after the quarter ended. What have you seen? Because when we talked to you on March 4th, you thought you'd be able to navigate the tariffs fairly well. The tariffs were quite a bit more than anybody was anticipating. What did that higher tariff mean for your bottom line, or what will it?
Hi, Becky. Great to be here. Let me start with a quarter. This was a strong first quarter with top-line growth, gross margin expansion, and continued operational excellence. We are also off to a strong start in the second quarter with consumer demand up double digits.
Our brand portfolio, flexible supply chain and balance sheet are clear advantages during this uncertain time, and we are maintaining our target of $600 billion of share repurchases this year.
As it relates to tariffs, we're taking mitigating actions designed to fully offset potential incremental cost and continue to manage our business and look for a supply and provide quality product for our fans. What are those actions? How do you mitigate the tariffs?
Well, there are three areas where we look to find efficiencies and mitigate for costs. We're looking to accelerate the diversification of our supply chain and further reduce reliance on China's source product. We're optimizing our product sourcing and product mix.
And where necessary, we will be taking a pricing action in the U.S. Okay, let's talk about each of those. I know you've been trying to move your supply chain away from China for some time. Where are the majority of your products made at this point? How can you speed that up and what countries will you go to do that with?
We've been on this journey for seven years. This is not something that we've done overnight. We've diversified our manufacturing footprint and developed a flexible model to adapt to changing market conditions. We currently source product from a mix of own factories and third-party vendors in seven different countries.
by the end of this year, China will be below 40%-- this year, China is below 40%. And in two years, no country will be at more than 25%.
China currently represents less than, as I said, 40%, which is less than half of the industry average. And in terms of U.S. imports, China represents less than 20% of our global production, and we plan to reduce that further to less than 15% by next year and less than 10% by 2027 with additional contingency plans to accelerate that if we need to.
You know, the president's point is to try and get production moved back to the United States. Is that going to happen with the toy industry? We need to remember that a significant part of toy creation happens in America. Design, development, product engineering, brand management, all happens in America.
Making product, producing product in other countries allows us to create quality product at affordable price points. And this is something we are committed to do, to continue to create quality product and find the right balance of price and value all in the service of the consumer. But if the tariffs come and they stay, would it be cheaper to manufacture toys in the United States?
We don't see that happening. We believe that production in other countries where we can be efficient and more productive is the best balance between manufacturing outside of the U.S. and continue to develop product in terms of design and creativity in America.
The toy industry has pushed for exemptions from the tariffs. The president basically used toys as an example, though, that, you know, kids can have two dolls instead of 30 or even more than that. So it doesn't sound like that's in the working. Have you had conversations with the administration about this? Look, the 80 percent of toy production globally does happen in China.
And what the Toy Association said is that many companies are exposed. If this continues, there will be a significant disruption in the industry. We do support the Toy Association advocacy for zero tariffs on toys to ensure that safe and affordable products remain accessible to everyone, given that toys are such an essential part of children's lives. It's important to say that.
Yeah, is Christmas at risk? We hear...
you know, huge proclamations that back to school is at risk, that Halloween's at risk, that Christmas is at risk. Is Christmas at risk or is this something that will be managed through? Look, at Mattel, we are committed to the uninterrupted supply of quality products at a wide range of affordable price points to children and families everywhere, including Christmas. Okay. Inan Kriz from Mattel. Thank you for joining us this morning, Inan. We hope to see you back in studio soon. Thank you, Becky.
Next on SquawkPod, legendary investor and risk manager Paul Tudor Jones. Good Lord. Not-for-profits are the linchpin of the social safety net. His role in the anti-poverty Robin Hood Foundation, plus his big warning on AI. Somewhere between a quarter of a percent and a third, at least 10%, needs to be on AI security by the people who are creating and profiting from these models.
Technology's risks and rewards right after this.
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You're listening to Squawk Pod from CNBC. Here's Andrew.
We are joined by a very special guest right here at the NASDAQ to discuss the economy, markets and so much more. Legendary investor Paul Tudor Jones is here, founder and chief investment officer of Tudor Investment Corporation. And he is, of course, the founder and a member of the board of the Robin Hood Foundation, which is going to be hosting its annual benefit next week. Always a big night in New York.
A lot of money, hopefully, to be raised. Hopefully, we're going to raise $75 million. Well, we're going to talk about that in just a minute. But let's talk markets first. I was going to ask you about the stock market itself. But then you just said something to me which makes me a little bit nervous, which is you're focused less on that right this moment than you are about artificial intelligence. What do you mean? Well, let me just say I was minding my business, minding my business. I went to this tech conference about it.
two weeks ago out west. And I just want to share with you what I learned there, Chatham House Rules, so we can talk about the content. So it was a small one, 40 notables, but real notables, like household names that you would recognize, the leaders in finance, politics, science, tech. And they had a variety of panels. I was on one on capitalism and
There was a tech panel that had four of the leading modelers of the AI models that we're all using today. So it'd be persons one through five of each of those four models. And the quick three takeaways from that are, one,
Wow, AI can be such a force for good, and we're going to see it immediately in both health and education very quickly. It's going to be fantastic. That's the good news. To the neutral news, these models are increasing in their efficiency and performance between
On the very low end, 25%. On the high end, 500%. Every three or four quarters. So it's not even curvilinear. It's a vertical lift in how powerful artificial intelligence is becoming. And then thirdly, and the one that disturbed me the most, is that AI clearly poses an imminent threat, security threat, imminent threat,
in our lifetimes to humanity. And that was the one that really, really got me going. And when you say imminent threat, what do you mean? So I'll get to it. So they had a panel of, again, four of the leading tech experts. And kind of about halfway through, someone asked them on AI security, well, what are you doing on AI security? And they said the competitive dynamic is so intense among the companies that
and then geopolitically between Russia and China, that there's no agency, no ability to stop and say, maybe we should think about what actually we're creating and building here. And so, and the final question is, well, what are you doing about it? And he said, well, I'm buying 100 acres in the Midwest. I'm getting cattle and chickens, and I'm laying in provisions. For real? For real. For real.
For real. And that was obviously a little disconcerting. And then he went on to say, I think it's going to take an accident where 50 to 100 million people die to make the world take the threat of this really seriously. Well, that was a freaky deke to me. And no one pushed back on him on that panel. And then afterwards...
we had a breakout session, which was really interesting. All 40 people got up in a room like this, and they had a series of propositions, and you had to either agree with or disagree with the proposition. And one of the propositions was, there's a 10% chance in the next 20 years that AI will kill 50% of humanity. So there's a 10% chance that
that ai will kill 50 of humanity in the next 20 years agree or disagree so uh i'd say the vast majority of the room moved to disagree side i had just heard joe rogan and elon musk uh two months ago where elon musk said ah there's only a 20 chance that ai can annihilate humanity
Now I know why he wants to go to Mars, right? And so about six or seven of us went to the AGRI side. And I'd gone there because of what I'd heard Elon Musk say, who's maybe the most brilliant engineer of our time. All four modelers were on the AGRI side of that. All four of the leading developers of the AI models were on that side. And then we debated. Then the two sides got to debate.
And one of the modelers says to the disagree side, if you don't think there's a 10% chance as fast as these models are growing and how quickly they're commoditizing knowledge, how easily they're making it accessible that someone can biohack, biohack, because that's where the real weakness is.
a weapon that could take out half of humanity. I don't know. 10% seems reasonable to me. So thank you for bringing us this great news over breakfast. No, can I just say, I'm not a tech expert. I'm not. But I've spent my whole life managing risk.
That's why I'm here today is because I'm as good as there is on macro risk management. And we just have to realize, to their credit, all these folks in AI are telling us we're creating something that's really dangerous. It's going to be really great, too.
But we're helpless to do anything about it. That's, to their credit, what they're telling us. And yet we're doing nothing right now. And it's really disturbing. OK, so let me ask you then, to your follow-ups, what would you be doing from a sort of policy regulatory perspective? And what would you be doing as a risk manager investor perspective?
Well, first of all, again, I think markets are irrelevant with regard to this particular topic. Because it's existential. It's existential. And they're telling us that. And so there are three things that we have to do. First is 2024, there was about $250 billion spent on AI by the Mag7, maybe $500 billion totally globally spent.
According to those four models, the AI spend on security was less than a billion dollars. So a quarter of a percent on AI security versus out of 250 billion spent. So these companies started by great men, great men, great moral men of great character. They need to step forward and show the ethical and moral leadership and need to spend at least, well, Jeffrey Hinton,
The godfather of AI, he's the one who developed neural nets, which is the precursor. He just had a podcast a month ago, or no, excuse me, he was on a newscast a month ago where A, he agreed with Elon Musk's assessment that 10 to 20% is about the right number for it to annihilate humanity. He said they should be spending a third. So we've got it somewhere between a quarter of a percent annihilation.
And a third, at least 10%, needs to be on AI security by the people who are creating and profiting from these models. That's one. Two, President Trump has to get in the game. He has to be in the game. You can have good deregulation and good regulation side by side. They're not mutually exclusive.
So in this particular instance, on his watch and on President Xi's watch, in the next four years, we'll probably have artificial superintelligence, which means you take one of these algorithms that's smarter than any human on Earth, have more than a PhD equivalent, and then you link them with a million others, and we're going to have that big bang. We're going to have artificial superintelligence. So he has to get in the game.
I mean, if you think about it, right, we have cars that can go twice the speed limit. We have planes that can break the sound barrier. But we have created regulations for our safety and for social cohesion to live within that. So we have this large language model has been around for 30 months.
It took the greatest generation 18 months for the Atomic Energy Commission to be formed. He has to get in the game and focus like he does on tariffs and on the border. He has to get in the game and regulate this.
While I have you here, I want to ask you about tariffs and regulation and the markets just right now before we talk about Robinhood. Yeah, I just want to say one last thing. I'm really concerned about these open source models and how they are commoditizing and making what were previously indecipherable pockets of knowledge easily accessible. You can have
A bad actor like Osama bin Laden, take these things with his cult following somewhere down the road. Or you can have innocent actors like hopefully those researchers in Wuhan Laboratory make a mistake, who made a mistake,
and they can be real threats to humanity. So we really, and then finally, we have to do something. You individually, every time a tech expert comes on this show, you better ask him, what are you doing on AI security? We individually have to ask our elected officials, what are you doing today on AI security? We're being called out. They're telling us that they want to be regulated. We have to do something now. Okay, people.
Because we're going to run out of time. Yeah. And there's a lot of folks who watch you and they want to know what you think about these markets. They want to know what you think about tariffs. They want to know about what you think about what's going to happen over the next 12 months. Right. Where are we? For me, it's pretty clear. You have Trump who's locked in on tariffs. You had the Fed who's locked in on not cutting rates. That's not a good that's not good for the stock market.
We'll probably go down to new lows until either, even when Trump dials back China to 50%. And that's what you're expecting? Oh, I'm sure he'll dial it back to 50 at some time. I mean, I think that's kind of in the market right now. So he'll dial it back to 50 or 40, whatever. Even when he does that, you've got those tariffs, the equivalent of a 2%. It'd be the largest. There are taxes that like the largest tax increases, the 60s.
So you can kind of take two to three percent off growth. And then you've got the Fed, who's unless they got really dovish and really, really cut. You're probably going to probably go to new lows. And then when we're in new lows, the hard day don't start to follow. And it'll probably create the Fed to move, create Trump to move. And then we'll get some kind of rally. Is there an optimism, though, from that? Do you see a rainbow at the other side of this policy?
on tariffs and what can i just say correcting the trading balance was a great idea uh tariffs used i think surgically surgically not to the extent that conceivably he's used would have been great also um i've
You know, if you think about China coming to WTO, we had free trade, but we didn't have freely floating exchange rates. So this problem started 20 some odd years ago. It's just manifested itself finally, really to the tipping point right now. We're going to have to go and run out of time. I just want to talk about Robinhood for a moment. Also wanted to ask you, by the way, about not-for-profit statuses of not-for-profits in America today and how much you're concerned about what's going on there. Well,
Can I just say, good Lord, not-for-profits are the linchpin of the social safety net that keeps America great. It's the linchpin. There's nothing more important. The intellectual capital that comes out of not-for-profits is so important to guide what we do socially, both from a governmental standpoint as well as what we do privately, just incredibly important.
$500 billion of philanthropic giving, I think realistically you put a multiple on it. I think at Robinhood we think our giving has a nine multiple. Let's just say that we're the top of the heap and it's really a three or four multiple. You're still talking about $2 trillion of capital for good, for goodness. So they're really important.
Here's the key takeaway for us this year, and I think why this year is maybe our most important year. You look at the budget cuts that are planned, and then what you really got is you got an 8% drop in incomes for the lower 20%. That's what we're looking at, an 8% drop for the lower 20%, while you and I and probably most of your listeners
are going to come out of this unscathed. So does that sound right to you? Of course not. Okay. So I can't control what happens in Washington. I can control what I do. And I'm hopeful. I'm hopeful that like in 2008, when we were...
on our ass in New York City. That was our biggest fundraising year ever. People that were down 30% in their net worths gave more than they ever did because they saw what was happening to the least among us. And I fully anticipate that this year, that particularly the people that are benefiting from this particular policy are going to give more, and I pray they do next Monday night,
are going to give more than they ever had. We've got, just so you know, the best lineup we've ever had. We've got The Weeknd. We've got Seth MacFarlane. We've got Oz the Mentalist, who's going to come out and predict who Trump is going to replace Powell with. So we've got all kinds of... Keith Urban coming out of the country to play in the city. It's going to be great. Paul Tudor Jones, thank you for scaring us and inspiring us this morning. I did not scare you.
I illuminated us so that you have a responsibility to ask every tech person on here, what are we doing on security? You got a deal. Paul, thank you. Appreciate it.
And that is Squawk Pod for today. Thanks for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the smartest takes and analysis, the interviews you can't miss, all the best of our TV show right into your ears when you follow Squawk Pod wherever you get your podcasts. That's it. We'll meet you right back here tomorrow. We are clear. Thanks, guys.
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