Treasury Secretary Scott Bessent on the 90 Day Pause 5/12/25
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Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Markets cheer a 90-day tariff truce between the U.S. and China. Treasury Secretary Scott Besant on the slashed tariff rate. Now we have a meeting mechanism. We loosely christened it the Geneva mechanism. And the diplomacy ahead. Make no mistake, one of the goals here is to open China for American businesses in a fair way.

The travel mess at Newark Airport set to upend summer plans. Are Phil LeBeau with some advice? If you can, go somewhere else. Why risk it?

Plus, an executive order to lower prescription drug costs. And President Trump set to accept a luxury jet from Qatar. It raises questions. Would you accept a phone that the Chinese government gave you or a car that the Russians gave you? It's Monday, May 12th, 2025. Squawk Pod begins right now. Stand back, you buy in three, two, one, cue, please.

Good morning, everybody, and welcome to Squawk Box right here on CNBC. We're live at the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And the news of a 90-day lowering of most tariffs between the United States and China to a much lower level, 30 percent is what we're talking about, which is well below the 145 percent that existed before this.

and far below the percentages that Donald Trump was talking about himself on Truth Social on Friday, saying maybe 80% sounded like a good number. Right now, we're looking at the S&P 500. We have basically erased all of the losses that came from Liberation Day since the Trump tariffs, down by just two-tenths of a percent at this point. So we've made up all that ground that came back since April 2nd. So market's on the move in a big way. And look, I will say the

The president himself said last week that you should buy now, that things are going to be very good. This sounds like very positive news coming not only from the U.S. side of this, but also from the Chinese side, the messaging that's been trying to find a way to make it work. I think clearly and to Scott Besson's credit and to this administration's credit, if they can actually get these tariffs down to something much more reasonable, hopefully it'll it'll keep the economy from falling.

I'm turning over in the wrong way. It's 10 on everybody and 20 on fentanyl, I guess, is the way it is. We're reading some comments that sounded like they were making progress on the fentanyl side of things, too. Then it'd be 10, which is going to be on everybody, supposedly. Which I'd be very interested in hearing those details on what that means. There is a question, though, longer term, and I actually am so curious to hear from the Treasury Secretary about this, to the extent that part of our goal is

was to box China out, was to actually make more things back in the United States. All of the other part of this negotiation. So it's funny, the market loves this because they didn't want the tariffs. But to the extent that you believe in the tariffs, if that's something you believe in, which I think this administration has done and talked so much about,

What can you get on the other side, too? Well, I think it raises questions for the tax plan, too. And a huge question about the tax plan in terms of what kind of revenue you're going to be bringing. I mean, I'd rather see this. Our friend Kyle Bass is a big China hawk, obviously. But he said China came begging to the United States. Thousands of Chinese businesses were shuttered and failed each and every day over the last few weeks. 1,800 businesses in China.

and Shenzhen and Zhejiang closed in one major area of China this week. I mean, I think there's something to that. It's nice that we have the Treasury Secretary first here because there's so many questions. So many questions. For more details on the U.S.-China tariff pause, we're going to get over to CNBC's Juliana.

who is in Geneva this morning. So here in Geneva, we witnessed marathon talks over the last two days, eight hours of discussions on Saturday, several hours more yesterday, and they've yielded a major breakthrough. As you noted, we've seen the U.S. and China now agree to slash tariffs for 90 days. So both sides have agreed to cut tariffs by 115%.

In terms of China's tariffs on U.S. goods, it's now going to come down to 10 percent. The U.S. tariffs on Chinese goods going to drop from 145 percent to 30 percent because you've still got some levies on fentanyl in there. During the 90 days, the Trump administration, Secretary Scott Besson saying the two sides will negotiate. The U.S. will continue moving toward a more balanced trading relationship. Take a listen to how the Treasury secretary characterized the Trump administration's approach to China and these negotiations this morning.

Neither side wants a decoupling. And what had occurred with these very high tariffs, as Ambassador Greer said, was the equivalent of an embargo. And neither side wants that. We do want trade. We want more balanced trade. And I think that both sides are committed to achieving that.

That was the Treasury Secretary speaking in this room just a couple of hours ago. He also used the opportunity to stress the Trump administration's

The fact that they've got a process, a plan, and now a mechanism for further talks seeming to address the market concern that there wasn't a plan in place when the tariffs were announced back on April 2nd. This is clearly a message to the market that a plan is in place and trying to emphasize that they've got a pathway now for further talks down the line over the next 90 days. Okay, Juliana, on the ground, in the middle of it all, we appreciate you joining us this morning. Thank you. Thank you.

President Trump says he's going to sign an executive order today to lower prescription drug prices to the level paid by other high-income countries. It's called most favored nation pricing. In a post on his social media network, the president predicted that prescription drug prices would fall by 30 to 80 percent almost immediately. Details outside instituting the new policy aren't yet clear. And a court blocked a similar policy.

pricing plan during the prison and prison first term. We've talked a lot about this. When you look at American exceptionalism, there are a lot of reasons for it. But I think our drug development is a big part of it. The hope that it gives families from everything from rare disease to, you know,

diseases like Alzheimer's that take so many people. If you look at it, it's really like our venture capital when it comes to this because you may have to develop 20 drugs to find one that actually hits. That's a couple billion dollars to develop a drug and only one out of 20. And 19 out of 20 will go bust and not see any return on it. So you make your money back on the one that does hit. I understand the rationale because...

The rest of the world, we subsidize. I mean, we subsidize security. We subsidize innovation. We subsidize even tech innovation and drug innovation. But I don't know if this works. It's the way to go about it. And, you know, we had conversations actually with the president about it. He's dead set on this. Well, I think the point that the journal made, was it last week? Was it two weeks ago? That when it comes to Medicare, it's 4% of what's spent. Right.

And it's much cheaper to have an innovative drug than all the other things. Hospitalizations. The other piece of it is very complicated because you're measuring the innovation side on one side, which we're desperate for, but there's also the accessibility side.

aspect which is there are lots of drugs that exist today that people who actually need them can't afford to get. It's a very frustrating part of it. It would be nice to see other countries step up and spend more. If you can't recoup your expenses, there's going to be drugs that aren't developed. I hear you. So I don't know about importing price control. I mean, I don't understand really completely

how they can have price controls all over Europe, and it's fine with all the drug companies to just ship the, you know, that, okay, whatever you give us, we'll take. But here, you know, it's ten times as expensive. I would rather see this wrapped into part of the negotiations with the trade deals that you're cutting with countries. If you're going to say you have to spend more on your defense, let's say you have to spend more on what you're doing here, too. Well, is it going to hold up in court? Well, it didn't the first time around. That's right. And that was when the drug company sued the administration. It got shut down.

But he is, and, you know, he's tired of hearing the crying from the major pharmaceuticals, but...

Maybe patient populations that step up and talk about some of these issues. And you're right, Andrew, the affordability thing has always been there. A lot of these companies have done a very good job of trying to make sure that once the drug is out there, once they start to recoup some of the innovation costs they put into this, it has been more accessible. It's the United States government that has paid the big. You know, Ackman is an enigma, and we had a great interview with him recently. Did you see his tweets about this? Finally.

A president that isn't going to allow the rest of the world basically to just live off of us. Because nobody gets to live off of them. From a negotiating perspective, the other question in the art of the deal is, is there a way by doing this, does it force the other countries? I'd rather see it brought straight into the trading negotiations. And there's already been some conjecture that they're going to have to pull it up like they did with NATO. And if they do, maybe that's a good thing. I would rather see that happen through the trade negotiations. Right.

and some of the deals that you're cutting with each of these individual companies rather than shutting down what is definitely a great part of what makes America so great. We'll see.

President Trump preparing to accept a luxury jet from the royal family of Qatar, which the president will then use as a new Air Force One. That's according to sources who spoke with NBC News. The White House plan to retrofit the $400 million Boeing 747 jet so it can be used in Trump's official capacity as president. Two sources saying the plane will be used in the future.

will then be transferred to the president's library foundation at the end of his second term which would then allow him to continue flying on that plane. But Qatar's media attache now to the U.S. called the transfer, quote, possible as no decision has been made. New Air Force One planes are years now behind schedule and billions of dollars over budget. But the possible gift from Qatar raising some legal and ethical questions after some of those surfaced yesterday, the president posted online

on his social network the following. So the fact that the Defense Department is getting a gift free of charge of a 747 aircraft to replace the 40-year-old Air Force One temporarily in a very public and transparent transaction so bothers the crooked Democrats that they insist we pay top dollar for the plane. Anybody can do that. The Dems are the world-class losers. MAGA. I have a different take on this. What's your take? I...

Would you accept a phone that the Chinese government gave you or a car that the Russians gave you on some of these things? It's like too easy. Just arguing it's bugged, maybe. Well, either bugged or they could have a kill switch that takes it down at some point. Not that I think Qatar is necessarily doing that, but there's a reason to not accept Trojan horses from other places.

Look, Boeing's a disgrace for not getting this up and running faster. This was put together in the first Trump administration to get the new Air Force One there. They are behind on so many things, and they should have put more focus on this. I don't know how you get around. The emoluments fraud. What's the laws? It's the emoluments fraud. You can't accept gifts from a foreign government. So I thought it was going to the library afterwards, like, you know, have you been out to the rake? I thought it was going to be sitting there. Yeah.

That's what they were saying, the sort of structural model, if you will, in terms of the approach they were going to take was to try to follow the Reagan approach, except that Reagan put the plane in the library. And the idea, at least in this instance, according to the reporting that I read, I don't know, was that he would be able to continue to fly on the plane. That I didn't think of. That was the sort of...

of how they were going to do this. Yeah, I don't like the idea of the bugging of it. I just wish that Boeing could actually get its act together and we can make a plane that we actually need and want. And so, but apparently he did take a tour of this plane. By the way, it is a Boeing plane. Right. He apparently toured this exact plane when it was, I think, in Florida. Yeah. Well, it's a nice plane. You heard Bernie the other day. I mean,

People like us and like Bernie that need to be places. I mean, just standing in these lines is a big pain for all of us. And, you know, Newark is one of our airports.

I would accept the citation. I'm not looking for a Boeing. I would accept a citation. A citation 10. From those viewers out there with access, we have, there's no monuments. Or Cutter. Cutter. We do have a clause, though. Hi, Cutter. We're not allowed to accept either. We love you, Cutter. I think it's called a conflict clause for us. No, we would, it would be some type of double leaseback circumstance.

Circle something. We can... I'm just going to... We'll figure out a strategy. You know what, guys? Guys, send a plane, and we're going to put it in the Kernan Museum. Afterwards. Which is... Right. When I'm 100, I'm founding that.

Coming up on Squawk Pod, the U.S. Treasury Secretary Scott Besant, fresh off a weekend of trade talks with his Chinese counterparts, are we headed to a rebalance? We do not want a generalized decoupling from China, but what we do want is a decoupling for strategic necessities, which we were unable to obtain during COVID. And we realized that efficient supply chains were not resilient supply chains.

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After a weekend of talks in Switzerland led by Treasury Secretary Scott Besant and Trade Representative Jameson Greer, the United States and China have agreed to a fairly large reduction in tariffs. The U.S. lowering tariffs on Chinese goods from 145 percent down to 30, and China, for its part, lowering levies from 125 percent to just 10. This is in effect for 90 days while the two sides keep talking.

On our TV broadcast this morning, we heard from Wendy Cutler, a former negotiator in the office of the U.S. Trade Representative. She served in the Obama administration. It's funny, we entered the weekend in a trade war and now we're in some kind of a love fest.

So how is this playing in China? Our reporter on the ground in Beijing, Eunice Yun, explains that Chinese leadership is taking some leverage from the idea that talk matters and looking like the more responsible party. The social media account that's linked to state TV has said that this proves that China's approach and firm commitment

countermeasures and stance, they say, has been highly effective. And a lot of this is because China got most of President Trump's tariffs off without actually having to do a whole lot. What was it like in the room? Treasury Secretary Scott Besant joined us today. Joe Kernan kicks things off.

Mr. Secretary, thanks so much for joining us this morning. We appreciate it. Joe, good to be with you. We know that some of the details of what happened, Mr. Secretary, but can you recount to us some of the color, how it came together? You mentioned that the venue and the equanimity. Was it cordial and conciliatory right from the outset, or would you characterize it as tough negotiating most of the way?

Joe, I would characterize it very much as President Trump, the equivalent of President Trump's relationship with Party Chairman Xi. They have a good relationship, but they both advocate strongly for their respective countries, for their respective citizens. So it was always respectful, respectful.

We have the two largest economies in the world. We were firm and we moved forward. We tried to identify shared interest. We came with a list of problems that we were trying to solve and I think we did a good job on that. And again, this is a 90-day pause.

For our tariff program, we had a plan, we had a process, and now what we have with the Chinese is a mechanism to avoid an upward tariff pressure like we did last time. So this is a 90-day pause.

Do you expect that tone to continue as these details, you know, the devil's always in the details, get worked out over the next 90 days? And what aspects do you think will be relatively easy and what will present the biggest obstacles?

Well, look, Joe, I don't think anything's going to be easy because this has been going on a long time. But what I can tell you, President Trump in his first term realized a very effective trade deal that was signed in the Oval Office in January 2020. And the Chinese delegation basically messaged to us that the Biden administration failed to hold them accountable for it. So I think that the...

January 2020, President Trump's highly successful previous trade deal can be a starting point. And knowing that President Trump will enforce any deal, I think will make the Chinese very deliberate

in their negotiations and know that whatever they agree to, President Trump will enforce. Would you say that the Chinese, were you able to detect or was it apparent that there was some urgency to make some progress given what we're hearing about Chinese businesses being shuttered en masse, factory activity declining, PMI declining?

maybe even some social unrest. Could you detect that or was there a, for lack of a better term, a stiff upper lip shown to you?

Look, the vice premier is a very skilled negotiator. He is a high ranking Chinese official. I had a very good economic briefing beforehand, but there was no sense of anxiety. There was a sense of moving forward. There was a sense of mutual respect. There was a sense that we had shared interests.

I have seen what's going on in the Chinese economy. We can see what's going on with the shipments to the U.S. And again, we are the deficit country. Historically, the deficit country has a better negotiating position.

Mr. Secretary, part of China's plan over the last several years has been to manufacture far more goods than it can ever consume. It exports that not only to the United States, but to other countries around the world. Other countries like the United States and countries in Europe have felt like they're getting dumped on with all of these excess goods that are being manufactured. Will your talks in other countries find ways to make sure that China can't

get around anything you set up in your deals with China by, let's say, shipping goods to Mexico and having that come up, those goods come up through Mexico. How do you shut that down? And did that come up this weekend? Well, Becky, that's already happening. That's already happening with many goods. It's happening with autos. It's happening with electronics. So that's part of the negotiation with the Mexican government that the

It's part of our overall strategy. And Chinese have an economic plan called dual circulation. And with dual circulation, our goal is to make sure dual circulation means export and domestic use. Dual circulation cannot mean that China overproduces and that

that only Chinese goods are consumed in China and then they export the excess to the rest of the world. So we have had the equivalent because of these high tariff rates of an embargo on China and those goods are gonna leak to the rest of the world. So, you know, our negotiations, we don't need to tell other countries what they need to do. They are seeing this wave of Chinese goods coming to their shore. They have to find a home.

And that could be at a discount price undercutting local producers.

Mr. Secretary, I have a question for you, which is the market's obviously very happy about this this morning. I think the global economy is quite happy about what you've been able to accomplish over the weekend. The question I would ask is how what you've accomplished over the weekend squares to some extent with some of the things that we've heard over the past couple of months from the administration about what the tariffs ultimately could do to both box out China, put pressure on them to do other things for us, to create opportunities

meaningful additional revenues in the form of tariffs, and perhaps most importantly, to force manufacturing back to the United States. And so by lowering these tariff rates to some degree, I'm sure there are critics who would say that it upends some of those goals.

Well, again, Andrew, this is just a pause. The April 2nd tariff level for China was 34%. So we have moved that down from 34 to 10. We still have the 20% fentanyl tariffs that were put on

in February. So just in 2025, we have added 30%. And again, one of the most important things that we're doing, we do not want a generalized decoupling from China, but what we do want is a decoupling for strategic necessities, which we were unable to obtain during COVID. And we realize that

that efficient supply chains were not resilient supply chains. So we are going to create our own steel, protect our steel industry, work on critical medicines, on semiconductors. So we are...

They're doing that, and the reciprocal tariffs have nothing to do with the specific industry tariffs. We heard, Mr. Secretary, that some progress was made on fentanyl in that deal, and that's 20 percent of the tariff that's going to stay. What progress was made, and how do you see that happening over the next 90 days, and do you expect...

A deal can be reached. And what does it look like? What do you want China to do exactly with fentanyl? Well, Joe, this is a priority for President Trump and indeed the whole administration. I have a personal stake in this. The two very close friends lost children to this terrible scourge. Hundreds of thousands of Americans die every year. And I think that's

that we saw here in Geneva that the Chinese are now serious about assisting the U.S. in stopping the flow of precursor drugs because the Chinese brought their trade delegation, led by the vice premier, but they also brought a

Deputy Minister for Security, who was their fentanyl expert, we brought someone from our national security staff, and they had a very long and in-depth sidebar about how our two countries could work together. As far as some of the non-tariff-related barriers that you talk about making progress on, we just had one of our reporters, Eunice, from Beijing,

uh just sort of talking about how the how the chinese view things they said yeah you know we we might talk a good i'm paraphrasing we might talk a good game and promise some things but it's very hard to to quantify or or to put into writing uh some of those other issues whether it's rare metals even currency uh manipulation how would that be uh affected in over the next 90 days what what type of agreement could you reach that has actual teeth for the non-tariff barriers

Well, Joe, these aren't problems that sprung up overnight. They sprung up over 40 years. So Ambassador Jameson Greer, USTR, has a book this thick of all the non-terror barriers and then also of the state subsidies for labor and for industry. So we've got a playbook. President Trump successfully worked

executed a deal in his first term, I think we can build on that. And that's the purpose of the 90-day pause, to see what we can do and work on these non-tariff barriers. Because China actually has low tariffs. It's these insidious non-tariff trade barriers that

that hurt American companies trying to do business there. And make no mistake, one of the goals here is to open China for American businesses in a fair way. We want American businesses to be able to sell into China, and part of the goal is bringing down these unfair non-tariff trade barriers, and that's what we will be focusing on.

Mr. Secretary, this is a 90-day pause. What comes next? Do you have plans to meet with your counterparts again?

Becky, as I said, the good thing is we had a plan, we had a process, now we have a meeting mechanism. We loosely christened it the Geneva mechanism, so I don't know where we'll meet again. Very agreeable meeting here. We got a lot done over two days, so I would imagine that in the next few weeks we will be meeting again to get rolling on a more fulsome agreement.

Mr. Secretary, we're the import country, obviously, as you pointed out, China's the export country. And I believe some of what we're hearing about maybe some of the stress, the economic stress we're seeing in China. But we have had worries and concerns about the economic stress in this country. Is it still coming? In other words, have we just not seen it yet in terms of job losses or consumer confidence? Do you expect the next employment report

to show any slowing? Is it not gonna happen here or we just haven't seen it yet in your view?

Well, Joe, I don't see any reason that should happen because I think with the tariffs, it's all a matter of calibration that we still there were 20 percent, approximately 20 percent tariffs from President Trump's first term. Biden left those on. He liked the income from them. So we're we're still getting that. And that was done in two steps, roughly 10 and 10. And the market is

and the economy has had several years to adjust to that. The 20% fentanyl tariffs went on in February, so if we were going to see any kind of an economic downside from that, it would already be apparent

I would think, and the economic data has surprised on the upside. And now that we have brought these very high tariffs down to 10%, I think the markets, business people live in the future. So I think we can go through at that 10% baseline, which is very easy to calibrate with.

Very good. Mr. Secretary, appreciate your time this morning. We know you got to run, obviously. And thank you very much. Appreciate it. Safe travels. Good to see you, Joe. All right. Next on Squawk Pod, another hectic day at Newark Airport. The impact on both travelers and the airlines. This is basically OPEC and United is Saudi Arabia, and they're going to have to bear the brunt of most of these cuts. We'll be right back.

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.

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You're watching Squawk Box on CNBC. I'm Andrew Ross Sorkin, along with Joe Kernan and Becky Quick. Another outage now at Newark Airport, and this is raising some more concerns about mounting air traffic control problems there and how they could cascade around the country. Phil LeBeau joins us with the latest. What's going on, Phil?

You know, Andrew, the ground stop yesterday was because there were communications issues. And while they were going for making sure that those were 100 percent as they should be, they wanted to get the redundant systems up. They decided just bring the flights down. Let's not sit here and risk any issues here. So here's where things stand regarding the Newark airport and the airport.

attempts to get it fixed as quickly as possible. The FAA and airlines, they will be meeting on Wednesday. The subject matter, reducing daily flights. There are about 475, 480 daily flights. What level do they bring it down to where they feel they're comfortable that they won't have to have to constantly delay flights or ground stops? Two official tech outages today.

Since April 28th, there was one on the 28th, and then there was one back on Friday. Yesterday, the ground stop, not technically an outage. It doesn't matter to the people who were there. The hundreds who were delayed, for their purposes, it was an outage because the communication issues led them to do a ground stop. Cancellations in and out of Newark Airport yesterday, 86 flights. That's about 14, 15 percent of their daily flights. And then

in terms of delayed flights, 282. And we're not just talking five, 10 minute delays. We're talking lengthy delays, which is infuriating for the people who are flying out of Newark Airport. Here is the Secretary of Transportation talking on Meet the Press yesterday about the near and longer term attempts to fix Newark.

In the next several weeks, we're going to have this reduced capacity at Newark. I'm convening a meeting of all the airlines that serve Newark, get them to agree on how they're going to reduce the capacity. So you book, you fly. We are building a new line that goes directly from Newark to the Philly TRACON, which controls the New York airspace. What happens now is it goes from Newark to N90, which is where it used to be controlled, and then down to Philly.

That doesn't make sense. We're going to have a direct line there. When will that be completed? So listen, it's a long distance. So we think by the end of the summer, it should be completed.

United Airlines has the most exposure in terms of flights in and out of Newark Airport. It has already cut down its flights by 35 per day. They're going to likely have to come down even further. Scott Kirby has said New York flights for all airlines should be capped. We've talked about this before, guys. There is not slot restrictions in terms of flights.

sort of an honor system, if you will. And what you're going to see on the meeting on Wednesday is a stronger agreement in terms of how many flights for airlines and how many for the airport overall should be instituted immediately until this can get resolved. Hey, Phil, I have two questions, both completely selfish, but hopefully they will help the public understand what's going on. For those folks who have reservations out of Newark,

over the summer, over the next six months, would you change them right now?

Depends on what the flight is. You know, I'm flying out of Newark when I'm going to the Paris Air Show. I'm sticking with that flight right now. But if you are flying in and out of Newark, let's say from Chicago to New York, and you can go into LaGuardia or into JFK, I've told my friends, sure, if you can, go somewhere else. Why risk it? Well, how big of a problem is that for United? I mean, this is a situation where this is basically OPEC.

And United is Saudi Arabia, and they're going to have to bear the brunt of most of these cuts. I mean, I'm booking elsewhere, too. I'm booking a flight for this week. I went out of LaGuardia instead of Newark, even though I've been trying to get back to my one case. You're not alone here.

You're not alone. And that's look, it's a challenge for for United. It's their third busiest hub. They would rather not have to cut back flights there. But the alternative, it's not working. It's not working at all, because if you're keeping these flights and then canceling, then you run into people who are saying, well, I wouldn't have done that. Why didn't you know further in advance, United Airlines or any airline going into newer? So as a result, it's not optimal. So I mean, and I know I'm understating that saying it's not optimal.

And Phil, let me just ask you just about the safety question, because I think that that is something that persists. Right. Despite what folks have said, when you hear or you read that there are moments, even 30 seconds where somehow the controllers can't actually communicate with

with the pilots. That to me, just by default, is something that I would imagine would be deeply concerning, especially when people are trying to land, when people are trying to take off. There's obviously lots of traffic in the skies above the New York and New Jersey area to begin with. What do you think of that as somebody who's covered this industry as long as you have?

It's horrific. If you are flying, you want to know that there is constant communication, that it's happening instantaneously. And even if it's 30 seconds, and yes, the odds are that your plane is going to have an issue with another aircraft within those 30 seconds. Odds are, no. But you don't want to risk that at all. It's also infuriating to me, Andrew, that we've known about this for decades.

It is not this is not like something that just came up and people were like, oh, where how did this happen? We've known about it for decades. And yet this government, the United States government, Congress, they have kicked the can down the street.

Time and again, time and again. And now you have the secretary of transportation saying, OK, once and for all, let's fix it. And what he wants is authorization. You give him the money. He will bid it out and they do it all at one time. Not this piecemeal appropriations committee. Come back to us and tell us when you need more money.

I think that that's the most infuriating part of this. You've known this was an issue. Can you help me with two pieces of this? And I ask out of ignorance, so I apologize if I didn't know this. This idea of outages in the sky where the control towers can't communicate with the planes for 30 seconds, 90 seconds, two minutes, whatever it is, that's been going on for years now.

To what extent, we don't know. I've not seen an audit done in terms of how often these types of glitches or outages have happened. So, Andrew, I can't answer your question authoritatively and say, look, it's been happening every couple of months over the last couple of years. But, look, what's happening right now is you have the air traffic control. They're bringing that aircraft into the airport.

the takeoff and landing is the most critical part. When you're up at 35,000, rarely do you have an issue with an aircraft. It's the takeoff and landing that is the most critical part. And that's why the lack of communication, even for 30 seconds, is completely unacceptable.

And Phil, can you just then explain in terms of just finally whatever backup redundancy or otherwise the systems that they put in place over the summer? Now, I know they want to build out things, obviously, for the entire network across the country. They want all the money appropriated as necessary.

As I imagine as a taxpayer, I think we should all hope this gets fixed and gets fixed in the right way. But what is it exactly that they can do to create a backup system that doesn't exist today? What does that look like? I don't think I fully understand. So there's a number of there's a number of different issues. Let's take the ground stop yesterday. It was a communication issue that they were having, not that they lost communication with the aircraft, but it was not as crisp and clear as the air traffic controllers would like.

They immediately said, we're not comfortable with this. Therefore, they did a ground stop and they wanted to make sure that the redundant system, the backup system was working. So they're doing exactly what they should be doing. It's not like the air traffic controllers are asleep at the wheel and going, you know, I guess, you know, I'm not really sure if I'm communicating. So what you're going to see is in terms of the communications, nothing.

A, make sure the most up-to-date equipment is in place and working, and B, have the backup system there. And then you heard the Secretary of Transportation talk about the fiber line. Right now, it's copper in terms of communication from the airport to the N90 to Tracon. Why it's still copper, who knows? And it's going to be a fiber line by the end of the summer.

OK, Phil LeBeau, thank you for walking us through all the different permutations of this. I don't know if you maybe feel better or worse, but I feel more informed. So thank you.

And that is Squawk Pod for this Monday. Thanks for starting your week with us. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Tune in weekday mornings on CNBC at 6 Eastern. Get the best of our TV show right into your ears when you follow Squawk Pod wherever you get your podcasts. Have a great Monday, and we'll meet you right back here tomorrow. We are clear. Thanks, guys.

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