‘Chaotic’ Policy: Janet Yellen & Lina Khan on Tariffs 4/14/25
45:04 Share

With reliable connectivity, enhanced cybersecurity, and advanced fiber solutions, Comcast Business helps turn today's small businesses into engines of modern business.

Powering the engine of modern business. Powering possibilities. Now through April 21st, new customers can get started with 150 megabit internet and security edge for $49.99 a month for 12 months with a two-year agreement. Plus, ask how to get a $500 prepaid card on a qualifying gig bundle. Call today. Restrictions apply. Equipment tax and other fees extra and subject to change.

Bring in show music, please.

Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. What is really happening here? Do you guys feel like you know? To put it bluntly, I have no idea.

Tariffs on, tariffs off. Uncertainty is the name of the game. Janet Yellen, former Treasury Secretary and former Fed chair on what's at risk. This is really creating an environment in which households and businesses feel paralyzed by the uncertainty about what's going to happen. It makes planning almost impossible. And the economic damage that could be done. There's good reason to believe that we're going to see a surge in inflation.

And the federal government versus Meta. The blockbuster antitrust trial for the trillion-dollar tech giant kicks off today. Lina Khan, former head of the FTC, helped build the case. What happened when Facebook became so much more? It resorted to this buy or bury scheme, where if it couldn't outcompete Revival, it either bought them out or would cut them off its network.

Plus, laptop shopping with tariffs in mind. You're back to what? Back to the PC laptop. What do you call it? Dell. I think we have a Dell. And a Masters tournament for the ages. No, I wasn't crying. But it was very emotional. You know I cry at all this stuff. You do. I do. It's Monday, April 14th, 2025. Squawk Pod begins right now. Stand and or bye in 3, 2, 1. Cue and or bye.

Good morning. Welcome back to Squawk Box right here on CNBC. On this Monday morning, we are live at the Nasdaq Market site in Times Square. A lot going on. I'm Andrew Ross Sorkin, along with Joe Kernan and Kelly Evans, who's hanging out with us this week. Thank you for being here. Thanks for having me. Quick is off.

Short week. It's a shortened week, but we'll see how short it really feels when it's over. We'll see when you get up at 3.30 every day for four straight days. Four straight days. And given the news cycle, it doesn't seem to stop. There were lots of speculation over the weekend about whether we were going to open up

higher or whether we would open up a lot lower given the sort of gyrations in terms of what the president and this administration has been telling us about these tariffs on China. Let's give you a brief update because it feels like we have gone on a traveling time machine of sorts. So this is the update on where we are on computer chip tariffs. So he made comments, new comments late last night

Trying to explain where we really are. We'll explain in just a moment where we were on Friday night. Take a look

Once those tariffs are in place, they're non-negotiable. Is that right? That's right. But the tariffs will be in place in the not distant future because, as you know, like we did with steel, like we did with automobiles, like we did with aluminum, which are now fully on, we'll be doing that with semiconductors, with chips, and numerous other things. And that'll take place in the very near future.

OK, so now that message, though, came at the end of a weekend of a lot, a lot, a lot of confusion surrounding what was really going on with these tariffs, because on Friday night, U.S. Customs published a list of 20 products categorized, including semiconductors and smartphones that it said would be exempt. These were, quote, unquote, exemptions from the White House's 125 percent tariff ordinance.

on China. And then all hell broke loose where everybody said, oh my goodness, he's capitulating. He blinked. Oh, this is the art of the deal. This is brilliant, depending on what you thought. Tim Cook got his way. All of it. Then yesterday on his social media site, and this is after actually some of

Numbers of the administration went on television. President Trump said that he was, quote, unquote, clarifying what was going on and that there were no tariff exemption announced on Friday, despite the White House putting they use that word exemption, by the way. These exception exemption. These products are subject to the existing 20 percent fentanyl tariffs, he said. And they are just moving to a different now tariff bucket.

That was also the message from top administration officials yesterday. And a lot of folks trying to understand what they were even saying at the time because of what we had read earlier. National Economic Council Director Kevin Hassett saying that phones and chips would be subject to tariffs on a national security basis. Then Commerce Secretary Howard Lutnick added that those tariffs would be coming in a month or two from now.

We need to have chips and we need to have flat panels. We need to have these things made in America. We can't be reliant on Southeast Asia for all of the things that operate for us. So what he's doing is he's saying they're exempt from the reciprocal tariffs, but they're included in the semiconductor tariffs, which are coming in probably a month or two.

But in China, Trump's move is being portrayed as a retreat. And I will tell you that Max Sorkin, my son, is now using the fact that the tariffs are back on as a reason that we need to go out and buy a laptop for him immediately before the prices go up.

So we had a pause. I thought I was out of the laptop buying business. And then as of last night, we were back to needing the laptop ASAP. I'll buy him a laptop. My God, you're a... He already has a laptop. I have a better one or a newer one. Get the newer one. You can definitely... You got six jobs and they're all high paying. You know what I said to him? I said, why don't we just wait this out? And if it costs twice as much...

It's on me, dude. So we can wait. We can wait. You're delaying the pain for you, for the output, the money going out. He's got high school coming up. And so I think he needs to have the most advanced laptop possible that I'd like to last for three or four years. So you think it could be better? You know me. I'm always waiting for the next best product. Is that Mac or is that PC? We're an Apple family. We're an Apple family for the most part.

Most people are I think there's the stuff let Nick was saying yesterday. They push back on that He said oh, yeah this but

You can't take everything the Commerce Secretary says to the bank necessarily. I think markets know that. Yeah, markets know that. And I would say... But I thought we're supposed to take what he just said to the bank this time. They're shrugging it off. Wasn't he the one who said, now this is going to be... Just wait, more is coming. You got Apple up 5% and everything's great today. If the 10-year had stayed where it went, I don't think we'd be up today. But I mean, it was 4.6. But even at 4.44... But it was, if you look at it...

three-month chart, 444 was where we were before we got that backup rate or the fall rate, which we didn't really understand. It's the deficit is so bad. The growth is slowing. Can someone just explain this to me? Because I'm still, I have to say, I'm still confused.

So we believe that the tariffs are just going to be at a 20 percent rate and that's the rate it's going to be for the foreseeable and forever future. Is that a fence? Which one? I mean, China. I'm on. I'm back to China and I'm back to chips. I think the only opportunity would be that's the fentanyl 20 percent. It's the fentanyl 20 percent. Everybody gets that right. No, everybody gets that. But that's not one hundred twenty five percent or one hundred fifty eight. Everybody thought we were moving. It's not a joke.

which they called it a joke well which part are we that's what i'm trying to understand what what is really happening you guys feel like you know to put it bluntly i have no idea six o'clock we may know more at seven o'clock or we may know less or do we know something we think they're down the reason the market's moving the way it must be is that people think that we're still we're down to 20 again i think they think it's a real example i think there's

Someone convinced him that you don't want to cut our tech industry off at the knees in terms of AI. But can I just suggest to you, I'm not suggesting we should because you know that I'm not in the camp of favoring this approach. Having said that...

If you are trying to bring manufacturing of important industries back to the U.S., once you decide that you are exempting chips and computers and all of that stuff, then what we're really talking about is bringing manufacturing of Nikes, you can see the memes online, back to the U.S., which is something I don't think he wants necessarily. So what are we really talking about here? I think he wants to bring it back, but I think he knows it would be too disruptive to do it immediately. But the Journal called the whole approach herky-jerky.

I think that's what it is. It's a little bit herky-jerky, which causes a lot of hanky-panky in the markets. I mean, we can't go like this forever. We'll be like watching that Masters final round for it, where you can't do that forever. It's just too much. It's just too much. It's too much. Yeah.

By the way, relevant data point perhaps is that China's exports, we learned, just jumped a lot more than expected in March. Businesses front-loading shipments to avoid U.S. tariffs. Exports rose 12% last month in U.S. dollar terms from a year ago. That was well above the Reuters estimate and the biggest jump since last October. In the first two months of the year, China's exports had slowed, but this is clearly showing there's a lot of front-loading going on. All the imbalance is getting worse before they're maybe going to get better.

Apple is what all the Sorkins use.

We are too. What is it? We're in the ecosystem. I went back to PC. Even on my Apple TV. You're back to what? Back to the PC laptop. What do you call it? Dell. I think we have a Dell. Had Dells for years. Apple Music. Apple. Apple. Apple all the way. Apple is the one company that could be severely impacted by American tariffs on smartphones, obviously, and other technology. Over the weekend, Bloomberg reported Apple increased its production in India.

of iPhones, almost 60% in the last 12 months, ending in March versus the prior year. The report said Apple now makes one in five of its iPhones in India, and that suggests a continued shift away from Chinese production that began during the pandemic.

And we alluded to this, but golfer Rory McIlroy completing his Grand Slam by winning the Masters. He beat Englishman Justin Rose in a one-hole playoff at Augusta National, birdieing number 18 after Rose had parred the hole. He almost, Rose sunk an unbelievable putt in regulation and then had an even shorter one, but just missed as it broke off to the right a little bit.

mackara had been leading earlier watch that lead evaporate on the back nine with some bogeys and his fourth double bogey for the week which is uh never we've never seen a person win the masters after four double bogeys he's just a sixth player in golf history to win all four major championships and with the win he took home a 4.2 million dollar prize for first place he becomes a

i think the sixth person to to win all four majors gary player amazing twice and uh afterwards i mean the the guy that we still have that uh and god bless me i think he's 85 or 86. uh jack nicholas was on the golf channel which golf channel got a lot of play uh everybody did anybody that covered it got a lot of play uh what a tournament uh for everyone but jack said he really wanted

We think he had on his shoulders to win the grant, you know, to finally complete that. But since he was a little boy, he wanted to wear a green jacket since he was six years old. This is my favorite part of the whole thing. Have you seen all the... No, no, no. About young Rory? All the clips? Yeah. I mean... Curly hair. Oh, my gosh. He's chipping into a washing machine on a talk show in Northern Ireland at age...

six or seven or eight or nine. I mean, he's a true phenom. He is a phenom. I know you laugh at me, but you saw the Nike commercial, right? With Tiger Woods? No. With the jacket of the dry cleaner that goes around and around and has a thing basically like when it's supposed to be delivered. It's

Sunday, McElroy. McElroy. It's pretty great. I had something in my eye. I was having trouble watching. That was my problem in a couple of... I'm like you. Only golf can do that. Somebody else was crying. No, they really weren't. I guess it was just me. Now that I think about it. No, I wasn't crying. But it was very emotional. You know I cry at all this stuff. You do. I do. I cry at everything. Rory broke down when he sunk that putt. I mean, he did it.

But what he put all of us, I had him before the tournament started. I bet on him a lot of money for me, $25. So I went 180. But Justin Rose, too, I mean, that guy. I said early on after, you know, after what happened to him on, I mean, he was, he led for two straight rounds, Thursday and Friday. Shot, I think, 75 on Saturday. But what a performance on Sunday. That guy is ice in his veins. Great guy. Nice guy. I think he's 44 years. Got great on Saturday.

sides now, but you cannot take anything away from Justin. I don't think he feels bad now because he lost fair and square on that playoff hole. I mean, the previous, I think Rory had the identical yardage in regulation on 18, hit the same club. I think he hit a gap wedge. And then he was in the same place. The first time he put it in the bunker and didn't get up and down. Second time, three and a half footer. Amazing. His little poppy was there. Yes.

Amazing. Golf can do great things, Andrew. It really can. That was something. That might have been the greatest Masters, one of the greatest Masters. And for some reason, Augusta, it always brings out the greatest. I was thinking, you know, you go through all the rigmarole to get there, and you probably thought to yourself, wow, I picked the right one. You didn't see the end?

There was Rory. Rory was talking and except Brian Roberts literally was about a foot and a half away. Like, I saw Brian. I go, there's the big boss. Sister network. Yeah. Congrats to all of them. Cheese will be next.

Coming up next on Squawk Pod, more on tariffs, treasuries and President Trump with former Treasury Secretary and former Fed Chair Janet Yellen. To me, President Trump is taking a sledgehammer. Not only that he's pounding our allies with this, but he's pounding the U.S. economy with this sledgehammer. She does not hold back in this extended interview. We'll be right back.

How will you shape the future of industrials with confidence? Whether you need to define your strategy, optimize your supply chain, or keep pace with data-driven manufacturing, EY professionals understand industrials and the sectors they supply, bringing the insights that deliver real outcomes. With a full spectrum of services, EY helps strengthen your business from factory floor to product development and beyond. So when the global market shifts, your business is agile enough to adapt.

EY. Shape the future with confidence.

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

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. Stand by Joe. Here's Mike. Q. You're watching Squawk Box. I'm also going to do that. We can't do that. I'm Joe Kernan along with Andrew Ross Sorkin and Kelly Evans. Monday, Tuesday, Wednesday, Thursday. 3.30, 3.30, 3.30, 3.30. Four. You get up at four? I do. Why do I get up at three? But that's why you're... A lot of things take time for me.

She called President Trump's tariffs the worst self-inflicted wound. Former Treasury Secretary as well as former Fed Chair Janet Yellen is with us this morning. And we're thrilled to have her as we all try to make sense of what is going on around us. Secretary Yellen, thank you for joining us.

Help us understand what you know or you think of, for example, some of the comments that were made both on Friday and then over the weekend as we try to make sense of which tariffs are on and which tariffs are on or off, rather. Do you know? Well, I think it's just completely chaotic. I know a lot of relief was felt when we discovered on Friday night or Saturday that tariffs

computers and phones, electronics would be exempt from the highest Chinese tariffs. But then we were told yesterday that that's just a temporary reprieve and that there will be further developments there. So really, things have been just chaotic. The reciprocal tariffs put on and paused

don't know what's going to happen next. This is really creating an environment in which households and businesses feel paralyzed by the uncertainty about what's going to happen. It makes planning almost impossible. Have you gotten calls from any of your former counterparts that are either allies or enemies or others trying to understand what's going on? And I'm curious if you have what you tell them.

Well, I have had a few meetings, and the truth is I honestly don't know what to tell them because

These are huge. I've said self-inflicted wound to me. President Trump is taking a sledgehammer, not only that he's pounding our allies with this, but he's pounding the U.S. economy with this sledgehammer.

I don't understand the rationale for the tariffs. Most economists would say if what you're trying to do is to reduce the trade deficit, imposing tariffs is not going to be successful and is not the way to go about doing that. The best approach there would be greater fiscal discipline, which we're not likely to see.

And perhaps it's to bring back American manufacturing. But I really think that's a pipe dream and not something that is likely to be accomplished. And we could even raise questions about whether or not, in a broad-based way, that's a desirable goal. And it's really hard to predict.

where this is going, the escalation with China could have very significant global implications.

Fair to say that the Biden administration did implement tariffs on China itself. So we should get back to that in just a moment. But I'm curious if you'd put your Fed hat back on or at least your former Fed hat back on and tell us what you saw in terms of the bond market last week and what you think of the bond market as a proxy for what's going on. How much your work, how concerned are you about that to the extent there are risks in the system? How do you see that playing out?

Well, we saw a very unusual pattern over the last couple of weeks in financial market developments. Normally, when times are chaotic and uncertainty is high, there's a desire to invest in safe assets, and that tends to push down U.S. Treasury yields. But U.S. Treasury yields went up.

And when U.S. Treasury yields go up, normally that attracts capital inflows that would boost the dollar. But both the dollar declined and U.S. Treasury yields rose. And what that suggests is that investors are beginning to shun dollar-based assets and that

calling into question the safety of what is the bedrock of the global financial system, namely U.S. Treasuries. Now, I was pleased that the 10 and 30-year auctions went well. I don't think we're seeing dysfunction in the sense of liquidity completely drying up

in the markets, but a pattern suggestive of a loss of confidence in U.S. economic policy and the safety of bedrock financial assets is really very worrisome.

Secretary Yellen, again, it's great to have you here. It's Kelly. I just have a question on that exact point. You were under some criticism for relying more on Treasury bills during your tenure, as we had some issues then with the amount of financing that had to be done. We are on equal, if not worse, footing now, and there are some rumors in the market that the Treasury secretary who came in and doubled down on your strategy might actually have to further increase bill issuance.

Do you think that that would be a sensible thing to do right now if it means the difference between kind of exploding long-end yields and costs to move even more in that direction on short-term bill issuance? What do you think the impact of that would be?

You know, the U.S. Treasury has, for a very long period of time, followed a strategy when it comes to issuance of longer-term Treasury securities of regular, predictable, orderly issuance. We don't try to play the markets, look at what's happening with yields along the curve, but announce

a medium-term program of bond sales that the market understands. So I don't think that moving to bill issuance because you're disturbed that long rates have gone up would be a sensible financing strategy. Bill issuance did surge.

after the debt ceiling was resolved and it really spiked. The reason for that is that the Treasury normally holds a cash balance of anywhere between $500 billion to $800 billion. And as the debt ceiling became

more and more binding that cash balance was run down to something very close to zero and had to be quickly rebuilt.

And short-term treasuries and bills serve as a buffer. And so that's where the issuance initially was. But over time, the regular orderly and predictable issuance pattern would be bringing that down. So there was really no plan to massively increase bill issuance. And I don't think that would be wise. Do you believe...

that either the Chinese could start dumping U.S. Treasuries or just not buy them, and or there was some speculation last week it was actually the Japanese that were doing that. I mean, in terms of just a rational approach to this, there is an argument to say that if the Chinese were to do such a thing, they would be hurting themselves. That would be my assessment, is that...

China, if they were to sell dollars, would be pushing up the value of their own currency and creating risks to the treasury market and to global financial stability that would harm them and would represent a very significant escalation. So it's not something that I would expect.

China to do. I'm sure China hopes that we will be able to negotiate a bargain on both sides, reduce these extraordinary tariffs. In terms of the quote-unquote art of the deal,

Who do you think has more leverage right now? There seems to be two arguments. One is that the United States is still the biggest economy in the world, the most important economy in the world that everybody needs and wants to do business with the U.S., and therefore we have leverage over our allies and others.

There's another perspective that over these next 90 days that China may try to create its own alliances with the EU and other countries effectively to ask things effectively of us or at least make it harder for us to have leverage over them.

Well, I think the policies that the Trump administration are following, both with respect to unilateral imposition of tariffs and also our alliance's commitment to NATO treatment of Ukraine, are

are really causing our allies to have severe doubts about the United States as a friend and reliable ally, and promises we've made, including through USMCA to Canada and Mexico that the previous Trump administration negotiated

We are simply burning those agreements without consultation. So I really am worried about the United States becoming isolated, viewed as untrustworthy,

And this creating an opportunity for China to work with some of our best allies, Japan, South Korea, others to try to. And, you know, that is that is a very substantial economic region. Have you discussed any of this with Scott Besson? No, I have not.

i know there was a dinner that took place last week among a whole host of former treasurer secretaries i don't believe you were there but i was curious if you i know you had spoken to him early on uh when he first got the job i i didn't know if you had had conversations with others inside the administration if you haven't spoken to him i was going to ask you whether you've talked to jay powell because he's the other person that may have to make some decisions about how to treat all this and i'm curious if you put your fed hat back on sort of how

how you think the Fed should even think about this, which is to say, you know, there's a question mark about whether the Trump administration has a put or a floor on this market, whether they can take the tariffs away or what they can do. But on the other end, you know, if the Fed effectively tries to prop up the system, they effectively, therefore, are supporting these policies. And it's unclear whether, well, it's not even unclear. Jay Powell clearly doesn't like these policies.

Well, look, there's no put when it comes to the stock market ever with respect to the Fed, although if...

risk to financial stability arise. And let me be clear, I do not yet see those in play and hope they don't come into play. The Fed has a range of liquidity facilities that I would expect them to deploy as they did in March of 2020 after the pandemic.

You know, I think that the tariff policies and the uncertainty they're creating create the most difficult possible situation for the Fed because the Fed is going to focus squarely on its two congressionally mandated objectives, price stability and maximum employment. And

Inflation's come down. It's not quite at the Fed's target. But there's good reason to believe that we're going to see a surge in inflation, at least for a while. And we've seen in surveys... No, I was just going to say, the definite... You know, last time, it obviously was not transitory. It was deep-seated. It was maybe, I don't know, money supply, however you want to look at it, fiscal spending, inflation.

That was the definition of not transitory when you called it transitory. This time, since it would be, you know, if it only, if the tariffs, if there wasn't a trade war, it's a one-time increase. So you don't, the second derivative isn't affected where inflation rises every year, not just one-time price. It just seems like this would be the definition of transitory, especially with oil prices coming down below $60.00.

I mean, this is a time to use the transitory word, not the last time. Well, a lot of what happened the last time was also one shot, but...

The transitory suggests a matter of weeks and months, and it clearly wasn't that. And this time, it may be longer as well. The really key question has to do with inflation expectations and whether or not there can be second-round effects when prices go up.

And I think they will go up very noticeably. Just think about autos. There's going to be sticker shock in auto showrooms quite soon, I believe. And many prices are likely to go up if these tariffs aren't unwound. We've seen in the most recent consumer surveys a jump in inflation expectations.

Now, that is not necessarily meaningful. Households don't usually set prices. So it's not automatic that inflation expectations have moved up. But it's something the Fed will have to watch closely and worry about. So especially given the history we've had of inflation and not being quite back to normal, the Fed, I think, will be reluctant to cut rates.

Recession probabilities have gone way up. I wouldn't want to go so far as to forecast a recession. But look, estimates suggest that the impact of these whole tariffs, if they stay where they are on consumers, could be in the region of $4,000. And that is a big

hit to household income that can lead to less consumer spending on a wide range of goods and the uncertainty that businesses face is likely to have a marked negative impact on investment spending

And a collapse in spending or a decline in consumer and business spending can really be responsible for significant recession. We want to thank the former Treasury Secretary Janet Yellen for joining us this morning, offering her perspective. And we hope to talk to you again very, very soon as we watch all this play out. Thank you.

Up next on Squawk Pod, Meta's antitrust trial in Washington kicks off today. And this will color the legacy of our next guest, former Federal Trade Commission chair, Lina Khan. This is one of the very few areas where we've seen continued agreement between Democratic and Republican administrations, a concern about big tech platforms, big tech gatekeepers. Plus how tariffs are affecting U.S. competition right after this break.

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.

Ryan Reynolds here from Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop. With Mint, you can get premium wireless for just $15 a month. Of course, if you enjoy overpaying, no judgments, but that's weird. Okay, one judgment. Anyway, give it a try at mintmobile.com slash switch. Upfront payment of $45 for three-month plan, equivalent to $15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com.

You're listening to Squawk Pod from CNBC, today with Joe Kernan, Andrew Ross Sorkin, and Kelly Evans. Here's Kelly. Welcome back. The federal government's major antitrust trial against Facebook owner Meta is scheduled to kick off today. At stake is whether they'll have to spin off Instagram and WhatsApp. The FTC, Federal Trade Commission, alleging Meta monopolizes the personal social media market, claims the company never should have been allowed to buy Instagram.

for the impressive sum of a billion dollars back in 2012 and WhatsApp for 19 billion in 2014. In a blog post yesterday, Meta's chief legal officer said the government's case ignores reality. The trial is expected to last several weeks and to include testimony from Meta CEO Mark Zuckerberg, from former COO Sheryl Sandberg, and from Instagram founder Kevin Systrom.

Join us right now, first on CNBC is former FTC Chair, Lina Khan. It is great to see you. This case, in many ways, preceded you. It was actually brought originally by the Trump administration, but then was thrown out while you were on the job, and then you refiled it. That's right. I joined the FTC in June 2021, and within a few weeks, the judge had tossed out the case the Trump administration has filed. We've fixed it, refiled it, it survived, and it's taken, you know, four years to get here. Okay.

Are you surprised that this case is here, which is to say that one of the things we've seen over the last couple of months is that Mark Zuckerberg has made a very aggressive effort to get closer to this president. He's been very supportive of this president. There had been some speculation that behind the scenes he was pushing for either some kind of settlement or for the case effectively to get withdrawn.

I'm glad to see that it's gotten to this point and that the various efforts by Facebook and Mark Zuckerberg to make the case go away on the eve of trial were not successful. Do you believe that there's a settlement that could be reached while the case is ongoing? I mean, that's always a possibility. I mean, that's always a possibility generally. But, you know, once it's taken four years to get to trial, by that point, the parties have usually exhausted any efforts to get to settlement.

Of course, with this administration, when we continue to see executives walk into the Oval Office seeking special favors until the trial is over and until we actually get a liability verdict and then a remedy, you know, we're all going to have to wait and see. What do you think of the argument that this is a case that is in the rearview mirror, that this is a mistake of a case and that the world has changed so much and has gone so far in the last decade, effectively, when so many of these deals were made that we're now looking at

TikTok as a competitor, so many other players in this universe that didn't exist even five years ago.

Yeah, and this is something that's going to come up as part of the case, as part of the FTC's argument that Facebook has illegally monopolized. And you have to remember that Facebook had actually done well for itself in the desktop market. But it was actually as smartphones were taking on that Facebook struggled to innovate and make that transition. And that's the moment at which it panicked. It saw companies like Instagram and WhatsApp experiencing astronomical growth.

And that's the point at which it resorted to this buy or bury scheme, where if it couldn't out-compete Revival, it either bought them out or would cut them off its network.

And this case is really about making sure we have free and fair competition so that innovators can succeed. I'm not going to dissuade you from those arguments, but I'm going to suggest to you for a moment that in a world of AI, where all of a sudden open AI and chat GPT, which basically didn't exist at the time, Gemini didn't exist, Anthropic, all of these things, X in its current formation, again, TikTok,

These are things that weren't even on the table at the time. And so how can we look back at a deal that was made, as I said, years and years ago and suggest that they should be broken up today?

Well, look, there's no expiration date when it comes to the illegality of a transaction. I think there is a way in which the entire social networking ecosystem looks different today because Facebook was permitted to go out and make these acquisitions, degraded its service for users, locked out other potential entrants. And now we're seeing a similar dynamic with AI, right? I mean, I think one set of lessons learned

from Web 2.0 is that when you have these lumbering monopolists with bureaucracy and bloat, they're not the best position to innovate. And that's why we saw them engage in illegal tactics. But what do you make of the argument that they actually, and this is now meta today, and that you actually probably want to root for a meta in the AI game because you have ChatGPT, you have Google, you have Anthropic. These guys are doing an open source version of it all and that that actually makes a more competitive environment.

I mean, we're going to have to keep looking closely at what's happening in AI. Obviously, the deep seek moment was a wake up call for a lot of the American companies and made clear that you really do want firms to be competing to make sure we're getting the best services, but also that they have an incentive to

efficiently create these products, right? What do you think of the idea of national champions though right now? Because that's the other big piece of this debate as we're looking at tariffs and we're looking at TikTok and whether TikTok is now going to be some kind of chess piece in a larger tariff negotiation. How do you think about that relative to a meta? That's something that meta would say, how is it possible that we're thinking about allowing TikTok into the United States at a time where we're also trying to effectively sue meta

out of existence yeah what this national champions argument gets made over and over again but in the united states we have committed to a system of open markets and free enterprise and that has served us extraordinarily well right contributing to uh... untold levels of innovation and growth and the last thing we should want is to

replace that system of open markets for a system that is more or less centrally planned by monopolists and a handful of gatekeepers. I have an antitrust question for you. In a world of tariffs, if in fact we do tariff a lot of other countries, how is that going to change the antitrust dynamics? So for a long time,

companies in the U.S. would say, look, we need to merge because we're competing against international giants all over and the marketplace is large. Once you start to add tariffs into place, the

sort of size and scale of the marketplace actually becomes quite limited. Does that change the dynamic? That's right. One argument you often hear is the market is global, we're being checked by these giants globally. And you're absolutely right that if instead what we see is a much more national system where those international players are less relevant, that is definitely going to make those antitrust defenses much harder. Okay, I got to ask you about a picture of you and Steve Bannon

on Twitter. What was going on with that picture? I ran into him on my way to a conference around big tech. And he likes you.

This is very odd bedfellows. You know, this is one of the very few areas where we've seen continued agreement between Democratic and Republican administrations, a concern about big tech platforms, big tech gatekeepers. And so, you know, there was a conference with people like Senator Cory Booker, all sorts of startup founders talking about the continued threat that big tech monopolization. You get along with Steve Bannon? You know, I don't know him very well, but I ran into him at this conference.

What do you make of what's happened to antitrust, though, under this administration? So there were a lot of people in the business community that were thrilled to see you walk out the door. Right. And we're hoping that under a Trump administration, there was going to be all sorts of M&A activity, lots of deals that they thought that you were blocking. That has not been the case. Is that surprised you?

Well, look, I think we've seen some good continuity in terms of the assertive posture that we had taken. But I think more deeply, it's really underscoring how you need a rule of law for businesses and for investment. And as we see these signs that instead decisions could be made based on who is getting special favors, who is getting access, that really disturbs our rule of law system and creates that uncertainty. Have you spoken to your successor?

Yeah, I worked with Andrew while I was at the FTC. But have you spoken to him now? You know, on and off. What was your relationship like then?

Well, he was in a minority posture, and I think at that time felt a lot of pressure to kind of dissent on some things, though there was a lot of agreement, especially when it came to the issue of taking on big monopolies. And, you know, I think switching from the role of a minority commissioner to a chair can be quite significant. So he's been kind of learning the ropes on that. The other big question I wanted to get your thoughts on is this idea of big law.

And what big law has now done in a number of settlements now with the Trump administration? I'm thinking of Paul Weiss, Scadden and others that now effectively made deals with the government. What do you think of those deals? What do you think of what's happened here? It's obviously a big debate on campuses inside law schools. It's in in corner offices, in boardrooms about whether they should use those firms. Well,

Well, look, it's extraordinarily disturbing and troubling to see the capitulation that we're seeing from some of the big law firms. I mean, these are some of the entities that are best positioned to withstand and fight back against some of the flagrant lawlessness that we're seeing from this administration. And I think to see them all one by one fold is just showing where their principles lie. What do you make of the idea, though, the Trump administration is now going to use Paul Weiss to help with tariffs, for example?

I mean, it speaks for itself. Well, let me ask you a different question. If you were a company that needed to go up against the government, meaning to go up against someone like yourself when you were in this role, would you hire a Skadden or a Paul Weiss now? I mean, the question is, if you are seeing these law firms not even put on a fight for themselves when they are being faced with illegal actions, are you going to trust them to fight for your best interests? I think that's the real question.

And then finally, what do you make of the tariffs? And I imagine you talked to folks that were part of the former administration, but you talked to folks who were part of this administration about it. You know, not not very closely. I mean, I think we're all trying to keep up with the hour by hour changes. And I think we're seeing, you know, some confusion about what the strategy really is and if the goal is, in fact, to promote.

promote manufacturing and industrialization in the US, A, you have to pair tariffs with other key policies that this administration is retreating from. I would think that actually you would be someone who wants tariffs. I mean, I would think you're somebody who's wanted more competition in the country, wanted manufacturing to come back. I mean, you have also been a populist.

I mean, look, I think the past administration was using tariffs quite selectively in tandem with key industrial policy goals to make sure we were actually going to be incentivizing domestic investment in key areas and key strategies. I think the strategy we're seeing right now is totally chaotic. We're seeing kind of retaliation from China when it comes to these key minerals that is going to lead U.S. manufacturers totally exposed

What was the game plan for that? I mean, it's just totally chaotic. OK, different question. In your new role, you're back at Columbia. President Trump has put some big efforts for federal oversight over Columbia, withdrawn money, the like. What do you make of this? I mean, I'm going to let the institution take care of, you know, the various negotiations. You must have a view, though, of all this. They have.

Well, look, as a general matter, I think it's really important for academic freedom to make sure that universities are not having to shift their policies or shift how they're pursuing their academic work. But do you think things that had gone too far?

Well, look, I wasn't there, so I can't speak to, you know, what has been happening. But I think as a general matter, we need universities to be standing strong for principles of academic freedom. I mean, I'd heard a lot of concern from conservatives about wokeness and this idea that we were seeing censorship and too much curbing of free speech. And now instead we're seeing the exact opposite. So I think there's a real question. I'm not talking about the free speech. Were you not troubled by the violence?

Well, look, I think there's been, you know, a lot of upheaval on university campuses and various universities have really struggled to, you know, manage that. Lena Kahn, thank you for coming in this morning. Thanks for having me. It's a fascinating time. We hope to talk to you again soon. I want to thank Kelly Evans for hanging out. And thanks for sticking in for the rest of the week as well. Be here tomorrow. Same time.

And that is Squawk Pod for today, this Monday. Thanks for starting your week with us. Squawk Box is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. Yep, Kelly Evans will be sitting in all this week. Catch Squawk Box on TV weekday mornings on CNBC beginning at 6 Eastern. And get the best of that show right into your ears when you follow Squawk Pod wherever you like to listen to podcasts. We'll meet you right back here tomorrow. We are clear. Thanks, guys.

The wrongs we must right. The fights we must win. The future we must secure together for our nation. This is what's in front of us. This determines what's next for all of us. We are Marines. We were made for this.