Tariff Tolls: Price “Disturbance” & Friction for the NHL 3/5/25
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Hi, I'm CNBC producer Katie Kramer, today on Squawk Pod. Trump's tariff plans become reality and reaction is stark. From Wall Street to the president's first joint address to Congress. Tariffs are about making America rich again and making America great again. And it's happening and it will happen rather quickly. There'll be a little disturbance. To international borders. There are no winners in a trade war.

Former U.S. Ambassador to Canada Bruce Heyman joins us on this rough patch for diplomacy. For the United States, the very top of our list in terms of best friends in the world is Canada. And National Hockey League Commissioner Gary Bettman on the slippery stakes. Canadians love the United States and love Americans, but there's a policy issue that's going on and it's unfortunate.

Plus, the markets and many American industries reel on the fears of a large-scale trade war. Robert Frank and Mike Santoli are in with Becky Quick today. All three major averages now below where they were when President Trump took office in January. In fact, the S&P is a few points below the election day close. All that coming up and much more. It's Wednesday, March 5th, 2025. Squawk Pod begins right now.

Stand by in three, two, one. Good morning and welcome to Squawk Box here on CNBC live from the Nasdaq market site in Times Square. I'm Mike Santoli along with Becky Quick and Robert Frank. Joe and Andrew are off today. Yesterday, an extremely choppy, erratic day of trading. The Nasdaq swung 3.4 percent from its highest level of the day to its lowest. It was a

pretty big sell-off then a very strong rebound the S&P swung 2.3 percent over the session actually went green briefly late in the day and then lost that the Dow moved 1.6 percent so all three major averages now below where they were when President Trump took office in January in fact the S&P is a few points below the election day close so we're kind of testing that level and really it was fascinating action in stock market because

you know, we're in a six and a half percent pullback high to low in the S and P. Um, and that hasn't happened for a while since late summer. Yeah. Right. Cause every time we get to even five percent down, there's a bounce. Exactly. Has been, um, we kind of hit some technical triggers. We got almost to the 200 day average in the S and P the NASDAQ 100 got to a 9.8% loss from the high. And it felt like there was sort of this automated, let's just buy the mechanical dip. Uh,

And also some news over the course of the day might have helped. Maybe some easing of this sort of Ukraine logjam after Zelensky's post. You also had news from Germany. We'll get to that. Treasury yields had been on the decline. They've been pricing in a potential slowdown. You see the 10-year yield is now back up to 425 just about. It had gone below 4.2. The two-year is the one to watch in terms of Fed intentions, 397 still rising.

pricing in a little more in the way of cuts. Germany, very interesting action intraday. Two parties hoping to form the country's next government have agreed to create a 500 billion euro infrastructure fund and overhaul borrowing rules in an attempt to revamp the military and revive growth. Friedrich Merz's conservatives and the Social Democrats will put their proposals to the outgoing German parliament next week in a race to pass them before

for the new parliament takes over so investors been cheering this move they've been calling for germany to reform its state borrowing limits known as the debt break to free up investment and support the economy germa dax this morning is flying uh... german uh... treasured german government yields also higher

It's interesting. The bond was up by 19 basis points. The currency moves yesterday were really interesting. So normally tariffs are dollar supported, right? We saw the dollar weaken yesterday. So some people were saying, look, that's the growth scare, right? Some people were saying this is foreign investors taking money out of the U.S. market. And some of it now is becoming clear it was the euro strength that's part of that basket. You've got

ECB looking to probably cut rates or maybe cut rates again on Thursday. So you've got rates going down in Europe and you've got government stimulus coming up. It could be very strong for the euro markets. And for growth. Yeah, exactly. It's been something that economists and investors have wanted forever. Germany's under-levered. They're too fiscally constrained on almost any measure. And it's interesting because the cyclical

Stocks in Europe have been working really well. The banks have been ripping. So it's one of these maybe, I mean, I don't think President Trump was trying to revive non-U.S. economies, but it would help the U.S. as well if China and Europe go back to the growth level. It's been luxury and pharma that's been basically carrying Europe. So now to see defense stocks, European defense stocks,

boom the way they are. Well, just on the commentary out of Europe, or out of Germany, too, that they are basically going to do whatever it takes, they're saying, for Ukraine. So, you know, this is what President Trump has wanted, to push them into spending more. We'll see how things take off, but it is certainly being applauded by the markets in Europe. It is still, you have to keep in mind, in terms of our markets, it's still this one of these apprehensive moments where, you know, everyone's sort of waiting for the other one to make the first move, and the traders, you know,

It's usually like the second mouse gets the cheese, like you don't want to try to buy the absolute low. But, you know, again, six and a half percent drop off the highs. Do you think that's what caused the bounce yesterday? It was just technical, look, this is a buying opportunity? I think that's the initial reflux. Because it was hard to figure out what drove that bounce back in the midday. I think there's a sense of, OK, we've been sort of psychologically and financially pricing in the tariff move for a while. If you also go from, you know, the highs of the prior day on Monday, when we're

when President Trump basically confirmed that those tariffs were going on, you know, the market was down even more. You know, we're still well below those levels. So you had this sense of, OK, maybe we've priced it in the short term. Now everybody's on the growth scare bandwagon. We've you know, that that might maybe we've priced some of that in. But yes, technical triggers, massive short covering. You look at the most heavily shorted stocks. They always lead the way higher after a pullback and also just crazy rotation within the market. I mentioned, Becky, when I was on with you guys

in the 8 o'clock yesterday just to watch to see if the mega cap tech stocks act as defense. And they did. They actually kind of, because they're not tariff exposed and all the rest. So we'll see if that dynamic continues. Look, there's a lot of questions of what's to come. And still questions about whether the tariffs are really going to be in place. There was commentary that came from Commerce Secretary Lutnick late yesterday kind of suggesting that there could be some sort of an agreement or deal that is reached today. And so...

I think there's still this belief among a lot of CEOs, among a lot of investors, that, look, we're not going to have to deal with the tariffs as they've been described. Here's the comments from Lutnick that he made yesterday at Fox Business. He's going to work something out with them. It's not going to be a pause. This is President Trump with Canada and Mexico. But I think he's going to figure out, you do more and I'll meet you in the middle some way. We're going to probably be announcing that tomorrow, that tomorrow being today. So we're waiting to hear what happens.

And it was right after the close of cash trading and the futures immediately bounced on that. And so, yeah, if you have this, if you want to make the bet that we're at the moment of maximum tariffs and it gets, you know, kind of negotiated back from there, then maybe it doesn't have that much of a growth effect.

I do think it was very interesting. Letnick, when he was here, the Commerce Secretary on Squawk Box yesterday, was talking about two different types of tariffs. These are the ones that he was talking about yesterday. It has to do with fentanyl, with both Canada, Mexico, and with China as well. But then the next month is going to be very interesting. April 2nd. April 2nd is when we're going to see what really happens in terms of tit-for-tat with tariffs and how you renegotiate your entire global look at trade.

And in the State of the Union last night, President Trump, in talking about that April 2nd tariffs, it sounds like it's going to happen. Not just that, but he is counting on that for revenue to balance the budget. You know, when we heard Commerce Secretary and even Scott Besson yesterday talking about there are three ways we're going to help

you know, basically level the budget here. It's going to be tariffs. It's going to be the gold card and it's going to be cutting government. So they are counting on tariffs for revenue. And I'm not sure Wall Street has priced that in to that extent. It can't do all of the things they promise.

It can't be a great revenue source and also reduce the trade deficit and also encourage manual. You know what I mean? How many times are you going to count those numbers? Just to say that April 2nd sounds like a serious date, the market should really focus on whatever happens with the Mexico and Canada stuff right now.

Let's hear a little bit more about that speech last night. President Trump delivering that address before a joint session of Congress with key takeaways on the economy. Eamon Javers joins us right now with the highlights from that. Hi, Eamon.

Hey there, Becky. President Trump last night declaring America is back. He delivered the longest address to Congress by any president ever. And after two days of sharp downturns on Wall Street in the wake of his imposing tariffs on Mexico and China, the president defended the use of tariffs, saying this is something that he needs to get done for the American people. Take a listen. Tariffs are not just about protecting American jobs.

They're about protecting the soul of our country. Tariffs are about making America rich again and making America great again, and it's happening, and it will happen rather quickly. There'll be a little disturbance, but we're okay with that.

So you heard the president there saying there'll be a disturbance, but we're okay with that. Perhaps a reference to some of the trading on Wall Street, to some of the disruption he expects for farmers and the auto sector and other industries. The president saying, nonetheless, look, we just have to do this to recalibrate America's trade relationships around the world. He also talked about the idea of inflation going up, saying that his administration is working to tackle it and blaming the previous administration. Joe.

Joe Biden especially let the price of eggs get out of control. The egg price is out of control. And we're working hard to get it back down. Secretary, do a good job on that. You inherited a total mess.

But as you guys have been talking about, the key for this morning might be the comments from the Commerce Secretary before the speech to Congress by President Trump. Howard Lutnick suggesting in a television interview that there may be some kind of deal in the works between the United States, Canada and Mexico. He said they might be announcing something today, saying they might be probably announcing that tomorrow.

So that puts a big question mark over the morning for traders, I think, Becky, as you try to figure out, is that Lutnick jawboning the markets? Is that wishful thinking? Or is there a negotiation that's been going on behind the scenes that's ready to bear fruit this morning? We don't know the answer to that, and we're going to be following that bouncing ball through the day today.

You know, Eamon, a big part of what he laid out yesterday is what he plans to... The first part of the speech was all about what he has done in the first 43 or 45 days, whatever it's been, for six weeks.

The second part was about what they planned to do. And he reiterated a lot of those promises that he had made on the campaign trail in terms of the taxes. You're not going to pay taxes for overtime. You're not going to be paying taxes for money you earn from tips. You're not going to be paying taxes for Social Security benefits. That is a pretty heavy lift in terms of what it will take to balance those those promises.

And they're talking about balancing the budget, right? So how do you have that kind of revenue cut?

Yeah. How do you have that kind of revenue cut and balance the budget at the same time? Can they get the votes for that in a very, very thin margin in the House of Representatives? And then, you know, on the other side of it is the revenue cuts or the spending cuts, I should say, that they're getting from Doge. They're talking about cutting, you know, enormous amounts of spending in the future from Doge. If they can lock those in, maybe that pays for the tax cuts. And then somehow you have to balance the budget on the rest of

of the federal spending and that's just a very very challenging political thing to do becky because every dollar that's spent by the u_s_ government has somebody advocating for it somebody benefits from it somebody wanted to happen it's in there for a reason and those people will tend to fight when you try to cut it so politically how do they do that is an open question but that is the centerpiece of the rest of the legislative agenda for this president is the tax cuts

Eamon, you know, it was interesting that the president saying there there could be some short term pain, which is a language that that was probably realistic. But also we didn't hear in the first administration. It was interesting. Also, Besson yesterday in an interview saying, look, we're not the Main Street administration. We are the Main Street administration. We are not the Wall Street administration. So Wall Street may take a hit here is what he was implying. What was your sense from the speech last night in terms of.

how much this administration may care about market reactions about investors versus Main Street and jobs and manufacturing. Yeah, it's a great point, Robert. My sense is this is a much more populist administration than Trump 1 was. In Trump 1, you heard Steven Mnuchin talking about being a mark-to-market administration, looking at the Dow as basically a barometer for their success. You don't hear that kind of talk from Trump 2. And the reason is,

because they're very much embracing this idea of being a working class administration that needs to restructure fundamental structural pieces of the U.S. economy to benefit working class voters. And they're not as sensitive to moves on Wall Street. You know, if you were if you were going to blink, you know, yesterday would have been a good day to blink on the tariffs. Right. Given what we saw on Wall Street, they didn't do that. The president's insisting here in a speech to the country that we're going to have to

deal with some short-term pain in order to get the long-term gains. Except for some of that short-term pain could come in the form of higher prices for Main Street Americans for what they're paying at the grocery stores. So we will see how that goes along the way, too. Eamon, thank you very much.

New this morning, social news aggregator Digg is set to relaunch in the coming weeks. Founder Kevin Rose is buying back the site in a partnership with Reddit co-founder Alexis Ohanian. Digg and Reddit were rivals in the early 2000s, but Digg was sold for parts in 2012. The most recent owner is ad tech sales firm BuySellAds.

Rose said that he reached out to Ohanian and they started chatting about their old rivalry, which led to a discussion about how they could use AI tools to help solve some of the biggest issues that plague Digg, including curating quality content. The purchase price was not disclosed, but that's a happy makeup story for you.

I wonder if you could see that happening with other rivals in tech today. Yeah, the other kind of disused parts of the early internet or whatever. Well, I just am thinking of rivals who get to be business partners come back together. Sam Altman and Elon Musk again. We want MySpace back.

Next on Squawk Pod, digging into a trade war. Becky, Robert and Mike speak to the former U.S. ambassador to Canada, Bruce Heyman, about how President Trump got here. Why Canada? I personally think he's short cash. And I think he's trying to pass this big, giant, increasingly large tax cut.

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Welcome back to Squawk Pod from CNBC. Yesterday was day one of promised tariffs by the United States on products from our closest trading partners, China, and 25% levies on North American neighbors, Mexico and Canada. After months of threats, the numbers are now real and reaction reverberated from the new Trump White House across corporate America and international politics. Often, politics are personal.

Today, the United States launched a trade war against Canada. Their closest partner and ally, their closest friend. At the same time, they're talking about working positively with Russia, appeasing Vladimir Putin, a lying, murderous dictator. Make that make sense. Stan Becci, bye. Cuba, please.

That was Canadian Prime Minister Justin Trudeau yesterday as he was speaking about what's been happening with the tariffs. He was announcing 25% retaliatory tariffs on $155 billion worth of American goods. Joining us right now to talk about

All of this is Bruce Heyman. He is the former U.S. ambassador to Canada in the Obama administration. He's the CEO of asset manager firm Power Sustainable. He's the author of The Art of Diplomacy, Strengthening the Canada-U.S. Relationship in Times of Uncertainty. Longtime business leader at Goldman Sachs as well. And Ambassador Heyman, thank you for being here.

It's good to be here again. So I love hearing your perspective on this because you come at this not only as a former ambassador to Canada, but also a U.S. business person who has done a lot of work on both sides of the border. What do you think is happening here? So let's take a step back just a minute and look at this from the from the lens of friends, neighbors, allies. When you have friends in your personal life, you know, you think of that list and at the very top of that list are your best friends.

And for the United States, the very top of our list in terms of best friends in the world is Canada. And it's not just because they have an amazing trading relationship, which they do, but it's everything else that you'd expect from a best friend. They've been there for us in thick and thin in our deepest, darkest times here in New York and 9-11. They were here with the planes being diverted to Gander. They were here.

in Article 5 under NATO in supporting us in Afghanistan. They were here for us in Iran, helping get our diplomats out. All of these are almost storybook kind of sets of relationships. And so the relationship is based on trust. And so what is happening here this week

is a challenge to that trustful relationship. And so tariffs at this level shouldn't happen. We shouldn't happen because we have an amazing trade agreement that Donald Trump negotiated in USMCA, but it shouldn't happen because of a friendship relationship and a trusted relationship that if we have differences, we can easily

deal with those behind closed doors diplomatically. And that's what's not happening. And so as a result of that, this relationship is being challenged in a profound way. Are there is there a trade imbalance, first of all, if you strip out oil? And second of all, are there tariffs that they place on things like dairy and beef and other things that are not reciprocal? Because that's the case that Donald Trump has been making that that

we're getting the raw end of the deal on some of this financially. So think of this trillion dollar relationship that we have in which we buy and sell together. And the price of oil moving up and down does have a factor in terms of the level of deficit or surplus between our relationship.

But at $50 billion on a trillion dollar relationship, you're talking 5%. It's insignificant in terms of the scheme of things and the challenges that we face globally with larger trade deficits with countries like China.

And so, in the scheme of things, it's really small. And taking away oil? Insignificant and nonexistent. Well, that's what's been so interesting. Why Canada? Like, of all the countries that you would pick on, why do you think this happened? You've got more insight than we do. You know, I just think Donald Trump must have some other issue here. And those issues are either personal with Canada or the whole other issue is I personally think he's short cash.

And I think he's trying to pass this

big, giant, increasingly large tax cut in the US. And we have a number of Republicans who actually are budget conscious. And so the way to make ends meet for this next tax cut is one doge, you're gonna cut costs, but I don't think you can cut enough costs to make up this large tax cut. And so I think he's looking for revenue. Peter Navarro has told him this is the place, go put a sales tax, VAT tax,

tariff on all the goods that come to the United States. They don't vote for us. That's easy. Let's go get them. And that's why you did China, Canada, and Mexico. Those are the three largest trading projects. It's Willie Sutton. That's where the money is. That's where the money is. That's the case. The market better set up and pay attention because if they think that these are temporary or going to get rolled back off...

It's not going to yield the money they need if that's the reasoning behind it. If that's the case. And so it may very well be that the right level is a lower level than where we are. So when you have that as your issue, then you begin negotiating rate and exclusions and other things. What's your sense of...

the Canadians' willingness to kind of just go down this path and, you know, retaliate and deal with the hardship that might come along with that? Because it's been a pretty aggressive front from that side at this point. Look, they're hurt.

You know, you take your best friend and you violate that friendship. And they say you should be at 51st State. It's rough, you know, it's rough if you go to somebody and say, this is your spouse, I want your spouse. Like, this is your country. To do that is deeply offensive to the Canadians.

And to slap tariffs on, you know, uniformly across the country is also deeply offensive. And we shouldn't underestimate the impact that this is having on the average Canadian. And I would just say to the Canadian public, there are millions of Americans that value this relationship. Two-thirds of our state, the number one export market is to Canada.

We have tourism and trade and travel, and we do things together. We do sports together. And we value that relationship. Tens of millions of Americans. And I know this is a difficult moment, and I hope we get through it quickly. They have an election coming up. It's interesting to see how President Trump has, in a strange way, perhaps helped the left.

in Canada. What do you see coming up in the elections? How will that affect their economic policy? Well, the polls have moved pretty dramatically once Prime Minister Trudeau said he was stepping back. And so we have a leadership race in the Liberal Party, which will take place this weekend on March 9th. And it looks at a close race between Chrystia Freeland and Mark Carney. And Mark Carney is somebody we know pretty well here.

as a result of his business dealings at Goldman, as well as Bank of Canada and the Bank of England. Could that relationship between Carney and Trump perhaps mitigate some of this?

You know, it's all together possible. I know Mark, he's talented and he'd be an exceptional person to sit down across the table from any number of people in Washington. That being said, if Donald Trump's short cash and he needs it for his tax cuts, then that's a whole different story.

It's just the retaliatory stuff they talk about. Ontario's Doug Ford, the premier there, saying that he would charge a surcharge on Canadian electricity exports to the three states that pick it up, Michigan, New York, Minnesota. I think there's one and a half million Americans that get their power from there.

If they want to try to annihilate Ontario, I will do everything, including cut off their energy, with a smile on my face. So I'm encouraging every other province to do the same. Quebec, Manitoba, BC, we all have to act in unison out east. They rely on our energy. They need to feel the pain.

And he said they would even consider cutting power off if things get ugly enough. So we'll see how this plays out. Slippery slope, these things, and it's very dangerous. And, you know, I think the negotiations like this should be done behind closed doors. And hopefully we'll resolve this very quickly. Ambassador Heyman, thank you. It's great to see you. Good to see you as well. Tease will be next.

Coming up on Squawk Pod, oh, Canada. Tensions surface on the ice. Commissioner of the National Hockey League Gary Bettman explains just how intertwined our nations are. All players were, no matter which country they play in, get paid in U.S. dollars. So if the impact of the tariffs is to see the Canadian dollar drop,

relative to the U.S. dollars, it will make it more difficult and more painful. And a tariff reprieve so soon? News breaking during our TV broadcast this morning that some in the auto industry may be exempt. Our Phil LeBeau crunches the numbers. Tariffs are still in place. You'll see the automakers lower the incentives that are out there and they're going to have to cut their margins. We'll be right back.

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Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson report.

This is Squawk Pod. Up on Becky. Q. You are watching Squawk Box right here on CNBC. I'm Becky Quick, along with Mike Santoli and Robert Frank. Joe and Andrew are out this morning. We have been talking all morning about tariffs and the U.S. economic relationship with our neighbors to the north. No industry is immune from this discussion, including the big business of sports.

Canada is very important in the National Hockey League with seven clubs that are based in Canada. Joining us right now is NHL Commissioner Gary Bettman. And Gary, thank you for being here. Got a lot to talk about with you this morning. The revenue numbers that are coming in with the NHL, what you just saw with the face-off of the Four Nations. But...

I think we need to start this morning with the news of the day and that's these tensions that are rising between two great partners, Canada and the United States. I think the NHL has unwittingly kind of played the public face of the bad blood that's been growing between the looming trade dispute between these two nations. We've seen it play out with some Canadian fans booing the national anthem, with some Americans getting kind of fired up and you've had

an American president and a Canadian prime minister who have all been weighing in all around the games as they've been playing on these things too. How do you see it from where you sit? - Welcome to my life. It's really unfortunate that these two great countries, great allies for hundreds of years sharing a long border together,

And I think most of the tension isn't addressed at either country or at the people, because I spent a lot of time in the last 30 years in Canada, and Canadians love the United States and love Americans, but there's a policy issue that's going on, and it's unfortunate that...

the two countries, the people of the two countries that are a sport are caught in the middle of it. It's an important part of the NHL. I think 25% of the NHL revenue comes from Canadian clubs. In the NHL, everything's combined and mixed and blended so beautifully. You even pay all the clubs and all the players in American dollars. What are you dealing with right now? How does it play out? The issue in that regard is all players were...

no matter which country they play in, get paid in U.S. dollars. So if the impact of the tariffs is to see the Canadian dollar drop relative to the U.S. dollars, it will make it more difficult and more painful. We have revenue sharing, but a lot of our Canadian clubs do quite well, but

but that's going to be impacted by what happens with the Canadian dollar. We're hoping, I'm hoping, that this is a moment in time and both countries find a way to work through this. Have you had any conversations with anyone from the administration? Not yet.

We were with the Florida Panthers a couple of weeks ago with the president, but the issue didn't come up. And, you know, in terms of understanding it from our standpoint, we're not really privy to all the discussions that are going on at the highest levels of both countries. So we get to be affected observers as as observers.

I guess you can say. I assume you have sponsors that sell goods in both countries. What are you hearing from sponsors right now? I mean, to the extent that there's uncertainty, to the extent that there's pressure on both economies and pressure on the dollars relative to each other, it's going to cause some difficulties that are going to have to be adjusted for. I guess I would put you in the group of many, if not most, executives who are kind of hoping that this is

things that are used as negotiation tactics but then go away. Well that's why I'm hoping this is a moment in time and whatever has to be sorted out gets sorted out and if I guess we can be a microcosm of how this works we're happy to play any role that we can. Let's talk about the NHL business in the background for all of this. The business itself is at its strongest ever. I think the revenue came in for the 2024-2025 season expecting to exceed 6.6 billion dollars. How'd you get there? What's happening?

Well, actually, I think we're going to exceed $7 billion in mixed currency. And that's a function of the fact that the game keeps growing. Our attendance is strong, as strong as it's ever been. Our engagement with business partners is the highest peak it's ever been. I think we have...

seventy three national partners between both countries our clubs are are executing in terms of their business plans and their connectivity with their fans better than ever before ratings are strong and we have great media partners in canada and the united states

whether it's Disney and Turner in the States and Rogers in Canada. And we're in a good place because the game has never been better. We saw that particularly with the Four Nations tournament and what interest that generated. I mean, we had record ratings in really both countries in terms of watching the Canada-US games, the two of them. And it's great to see. And I think our fans

and sports fans in general have been energized by what they've seen. And at sports rights, I mean, this is the moment. It just keeps getting richer and richer for the sports rights when you have money that's coming in from the streamers at this point too.

Every one of the leagues looks a little differently at these negotiations. What for you is the sweet spot in terms of what you want to make sure is available to the most viewers as possible, but also making sure you're getting as much money as you can for it? By the way, those are the two issues that we're most focused on. We want to be widely distributed, which we are. ESPN and Turner, TNT,

ABC are doing a great job for us here particularly over the last few years since we've reengaged with them Rogers in Canada doing the same thing in fact we're currently in an exclusive negotiating period with Rogers with our contract coming up and we think that the broader the distribution the better our

our fans are going to be served. Plus, we're using technology in unprecedented ways to bring more of our games, whether it's the connectivity that you can get with more data, what we can do with the visualization of the game, use of player and puck tracking, which we're using, using that to create animated games for young people. These are all the ways we're looking

to connect and we have our outdoor events. I mean, last weekend we had 94,000 people in Columbus, Ohio watching a hockey game. I would have told you 10 years ago that would have happened. You would have thought I was crazy. So when you say broader distrust, broadest distribution, do you mean broadcast or do you mean where it's free for everybody or do you

mean broadest meaning, okay, a streamer that is international even though they're charging people to get there? Well, it's a combination and I think it's going to continue to evolve, particularly because of the difficulties we've seen with the regional sports channels. And so I think you're going to continue as contracts come up, you're going to see a mix. We've been, you know, digitized, if you will, and streamed for decades.

10 years in Canada, Rogers from Our Last Deal has always had the digital rights as well. And when you look at our presence on ESPN+, we've been streaming since we went back to the Walt Disney Company. So the combination of the two things, I think linear is still important. That's still your most viewed distribution for most people, particularly people my age or your age. Yeah.

Younger people who are cord nevers or cord cutters, they're gonna look for alternate sources of getting their content. - So you gotta be everywhere. - You gotta be agile. - Yeah. Gary Bettman, Gary, thank you very much for joining us today. Always appreciate having you in person. Lots to talk about, so come back soon. - Great to be with you. Thank you for having me. - Thank you.

New comments from Commerce Secretary Howard Lutnick saying in a television interview that the Trump administration expects to make an announcement on tariffs this afternoon. Lutnick said that the White House is considering certain sectors on which the U.S. could give Canada tariff relief.

He said that the tariff relief will be 25 percent and that the administration is focusing on compliance with the U.S.-Mexico-Canada trade agreement, including for the auto sector. Philip Oh joins us right now with more on this. Phil, we know what the automakers would like to hear, that they will not be penalized for having followed USMCA.

And we know that the Trump administration said yesterday that there were a number of phone calls between Trump administration officials and auto executives for the big three, no doubt, not just with the big three, but for the other auto industry players. A lot of suppliers are going to be massively impacted by these tariffs if there's not some type of an exemption there. Take a look at what we're looking at in terms of auto...

auto production on a daily basis between the U.S., Canada, and Mexico. This is according to S&P Global Mobility. It comes out to just under 70,000 vehicles. Yesterday, S&P Global Mobility put out a forecast saying, we think that if these tariffs stay in place, you're looking at 30% daily production going away in some fashion.

And that's the expectation. About 20,000 vehicles would not be produced. And it's understandable why. The choices for the big three, they're not real good here. They can either move the shift or the mix of the type of vehicle. In other words, build a more high content,

higher priced vehicles in the United States. If there's a lower priced version, build it in Mexico. That's one example of what they might be able to do. But their options are extremely limited. That's why you expect, many expect to see them cut shifts in Mexico and Canada. And then if the tariffs are still in place,

you'll see the automakers lower the incentives that are out there and they're gonna have to cut their margins. There's just no way around it, even as they pass along some of the cost increases to consumers. As you take a look at annual auto sales,

These estimates are likely going to come down if the tariffs stay in place. Most believe that we're going to be a little bit better than last year, maybe 16.2 million. The average incentive on a new vehicle, in other words, if you go to a dealer, on average, they will say to you, you know what, we're going to give you another $3,500 off a

particular vehicle in some form, whether it's rebates, whether it's financing, whatever it might be, that's likely to come down as the automakers look to preserve their margins as much as possible or limit the cut impact. So we'll watch, guys. We'll see, because the automakers, they don't have a whole lot of good options here, and especially the suppliers. I mean, they're locked in. The supply chain is locked in. It's not like you can say, let's build a plant in Indiana, have it up and going in about a month.

Right. So how quickly would this happen? Are we talking next week they would pull off incentives? Are we talking this quarter you're going to see a big cut to margins like how I think you would start to see it and there will be nibbling around the edges within the next week.

And then you really start to see it happen over time. Most people in the industry point to the chip crisis, Becky, as an example of what you saw happening with prices and with incentives. And between March of 21 and the end of 21, the average transaction price for a new vehicle in the U.S. went from just under $40,000 to more than $46,000.

And now it's at about 48.5, somewhere in that range. So if this sticks, if these tariffs stick, that's what many people believe you're going to see from the automakers. So, Phil, presumably, you know, the U.S. automakers are likely to say, look, we're in compliance with the USMCA. What types of exemptions in particular do you think they have a shot at getting? Is it just as part of the manufacturing process as parts go across the border or something bigger than that?

Great question. I think all options are on the table. I mean, look, the automakers will take anything they can get. They would like it to go back to what it was before President Trump was sworn in. I don't know if that's going to happen or not. And remember, the steel and aluminum tariffs, when those kick in, that's going to hit the auto industry as well. So they are under the gun right now. Yeah, no doubt about it. Phil, appreciate it. I also want to thank Mike Santoli and Robert Frank for being here. It's been a pleasure, gentlemen.

And that is Squawk Pod for today. Thanks to you for listening. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. They'll all be back tomorrow. Tune in starting at 6 a.m. Eastern on CNBC or listen anytime. Get the smartest takes and analysis from our TV show right into your ears in a podcast when you follow Squawk Pod wherever you like to listen. That's it. We'll meet you right back here tomorrow. We are clear. Thanks, guys.

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