GM CEO Mary Barra & NEC Director Kevin Hassett on China Trade 5/1/25
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This is SquawkPod and I'm CNBC producer Cameron Costa. On today's episode: A small shift from China on trade. The CCP state media reporting that President Trump's team has indeed reached out to discuss tariffs. And it could be a signal of openness. But CNBC Beijing bureau chief Yunus Yun says China is probably able to weather a tougher trade environment than the U.S. They say that Chinese people can eat bitterness really, really well.

What National Economic Director Kevin Hassett has to say about trade. Last week, China pulled back a bunch of tariffs on U.S. products, perhaps at a show of good faith. So I'm hopeful. And how that policy affects U.S. companies like General Motors, led by CEO Mary Barra. When we look at the auto industry, it's been decades of not having a level playing field around the world.

But we are making a commitment that we are going to bring more production back to this country to build on what we already have. Plus, a report that the Tesla board is in the market for a new CEO. Nobody's getting rid of Elon Musk because they don't like him. That's not what's happening. If it's happening at all.

Many headlines to get through today. We've got to sift through it and get the signal from the noise. It's Thursday, May 1st, 2025, and SquawkPod begins right now. Stand and or by in three, two, one, cue and or.

Good morning and welcome to Squawk Box right here on CNBC. We are live at the NASDAQ market site in Times Square. I'm Andrew Ross Sorkin along with Joe Kernan. Becky is off today. She's going to be with us tomorrow from Omaha where the Berkshire Hathaway annual meeting is going to be getting underway. And we're going to be talking to her and she's got a whole bunch of big guests for us. But in the meantime, what do you want to politely call yesterday? I thought it was pretty impressive. No, I thought it was really impressive. Impressive.

Very impressive. We were down 600 points at one point. We've closed up 140. Closed out May, where most of the damage, as it's always so weird, most of it was done as Liberation Day was being announced and we've been coming back

Ever since it's almost another case study. And anybody who either sold on April 3rd or who didn't, maybe they sold before that because the market had been coming down on anticipation. If you either sold or didn't buy, it's almost a 10 percent move, which is a good year for some people. So it's you know, we talked about it yesterday, how how difficult it is.

to if you look at what's right in front of your face, you'd never buy when you need to buy. You'd only sell when you shouldn't be selling. And we could go back down. A lot of people don't think we're going to retest all those. It is May, May 1st, the first month of, I should say for the month of April,

The Dow and S&P were both negative, but by a lot less than they were at their lowest points, as Joe was describing before, of the month. The Dow ended down about 3% in total. The S&P was down less than a percent. The NASDAQ ending April positive, up about a percent. That's crazy. A lot going on.

You need to update me on what people are telling you about this, whether it's true or not. Tesla is denying a report that board members recently contacted executive search firms to get to work on finding a successor for CEO Elon Musk. This came from The Wall Street Journal late last night. The paper says that the company's board met with Musk about a month ago and told him he needed to devote more time

to the electric car company and say so publicly. The report says Musk did not push back on that idea. Earlier this morning,

a post appeared on uh tesla's x account that was attributed to board chair robin denholm and she said earlier today there was a media report erroneously claiming that the tesla board had contacted recruitment firms to initiate a ceo search at the company this is absolutely false and this was communicated to the media before the report was published the ceo of tesla uh

is Elon Musk. The board is highly confident in his ability to continue executing on the exciting growth plan ahead. And then Musk got into the action on X early this morning, calling the journal story deliberately false. He called the Wall Street Journal a discredit to media. Tesla stock went down initially on this report. It's fallen roughly 40% since its mid-December highs, and the company

Let's face some public backlash due to Musk cutting Doge spending and his public embrace of President Trump last week. Musk said he would soon be spending more time at his car company. That stock is coming. So let's decipher what's going on here. Where there's smoke, there's fire. No, not necessarily. But I think there's a couple of things happening.

One is it is absolutely true and I can report that a month ago month and a half ago So you need it you need to get back there were board members who were concerned about it And by the way, there were lots of investors who were telling members of the board You have to get on Elon about this and is there a way to get him like so that was it? That was a real conversation the question about

you know robin's saying the board the official board right may not have been calling up search firms i doubt that the official i believe her when she says that do i also believe that there were search firm uh executives that may have contacted board members or board members that are friends with search firm folks who said yeah you know at some point we may need to like that

That happens in casual conversation all the time that people would start to. And by the way, is it instigated by the board members? Is it instigated by some executive search person who wants a fee? Is it instigated by a banker who wants to get in the middle of it? Like when a banker decides that the two companies should merge or spend and they approach the company. So my only point is, is it possible that there was some kind of.

So this is a smoke. This is a smoke. Conversation in the corner? Sure. Is the official board doing that as a choice? I'll take Robin at her word. I'm just saying, is there a chance that these other things could have happened? I imagine probably something like that did, but not in any kind of official way. Well, how bad is it to report that the board...

contacted an executive search firm and was looking for a new CEO. The piece said that board members... Board members, okay. Board members... But they... And I don't know if they said that they reached out. They said I think they had... They've been in conversation. But saying go ahead and make some suggestions for other CEOs, they would have... That's... If they did that, then that's something. If they didn't, then it's probably... By the way, I would argue that they're derelict if they're not doing that. If they're not.

Right? I mean, let's also, so there's like a lot of sides to this, right? Your job should be as a board member to have a succession plan. Maybe if you're totally, if you think that your CEO potentially may be planning to do other things at some point. And by the way, there,

There have been conversations. They're not because you're not talking about because of what happened to the stock, because he's you know, that's a very near term outlook. I don't think it's been up every year. Nobody's nobody's getting rid of Elon Musk because they don't like him. That's not what's happening. If he's not spending enough time there and you start to say part of the reason for the 40 percent drop in the stock from its highs is because he's been neglected. You could own a fiduciary.

basis say we need to look around. But that would be a stupid move. It wouldn't shock me if one of the board members happens to be friends with

with a search for a buddy in the search business and they happen to have lunch together or they go to a cocktail party together or whatever. And then, but by the way, and then the people in the search world then go crazy, right? Meaning all of a sudden they think they have an opportunity to go find the next great successor. Right. Right. That's how this happens. They have one 10 second conversation and then they're off to the races trying to go find somebody. That's how this works.

to get a commission or whatever it is. Well, because they would want to pitch that person. Right. And so could that have leaked out? I'm just wondering whether there's any... Some search person's looking? Does this tarnish the Wall Street Journal at all? Do you think they stand by it? I know you'd like to tarnish everybody. I don't know. I don't know if it tarnishes them or not. I...

it depends you i really have to go look specifically at the wording and the this and that i think that her wording is very specific i think their word is very specific so it's both sides they have a certain amount of spin and it's somewhere in the and i don't know what the truth is right look at that tesla board open search for a ceo to succeed that's a lot different than having conversations on the golf course with a buddy you got in in a search firm

There's a lot of nuance. I mean, I might like the tarnish media. You kind of like to tarnish Elon occasionally. No, I don't. OK. All right. I just think the bloom is off the rose for you and Elon. I think you are so wrong that I don't even understand why you do this. I'm not doing it. I just I work here. I sit across from you. I've seen a change ever since the flamethrower.

Flamethrower was five years ago. That was even before the orange Cheeto. China's state media now reporting that President Trump's team reached out to China for talks on tariffs.

It's an interesting development in terms of how this game theory goes. I want to get to Eunice Yun. She joins us now live from Beijing. Good morning. Thanks, Andrew. Well, that post is linked to Chinese state TV and a social media account. And that social media account is closely watched here for its government messaging on U.S.-China trade issues. So the post says that

the U.S. quote, proactively reached out to China through various channels. It argued that the U.S. is clearly, they say, the more anxious party. But it says that China has nothing to lose by engaging and that this could be what they describe as an opportunity to pressure the U.S. in trade talks since it asserts

that Beijing is in a stronger position. So the post is a possible way for China to signal that it's willing to embrace an off ramp for the tariffs, because what we're seeing is that they're saying we're open to talks, but at the same time, the U.S. is coming to China for these talks and also that China is in a stronger position, that China has the upper hand in negotiations. So the key point is that

by doing all of this, China saves face in the eyes of the Chinese public. Andrew? That's exactly how I read it. And we know, Eunice, and I'll be as tactful as I can because you're in China, but we know the way the CCP spins and operates. And we spin here, too. There's no doubt the Trump administration is involved in a lot of spinning. But

Big piece in the journal today is and I was trying to figure out if you had a 1% problem with the workforce in China because of they aren't exporting toys that they make or they're not at whatever you want to take. Take a company that's not exporting anything right now to the United States. I mean, the numbers get really large really quick.

with the size of China's workforce. And the piece here is saying that China has signaled that it's better able to tolerate the pain, but there are big cracks already starting to show. And I'm wondering whether you're seeing that over there.

Yeah, no, there's definitely big cracks. I mean, you're talking about the numbers. They're anywhere between like Goldman Sachs that said there could be 60 million jobs that are affected in the export sector. And there are cracks in that. There are several factories, suppliers I've spoken to, Walmarts as well, who are all saying that shipments have been paused.

for the most part, they haven't been able to ship those out. And that's really worrisome. People within the factories are worried about their jobs. People who are dealing with the shipping are worried about doing their jobs. I spoke to someone recently who said that on one of the ports,

the folks who are in one of the lanes that's actually dedicated to the U.S. lines, like if they're just playing cards. You know, it's just, it's a really difficult situation. And as much as the government says here that they want to help these exporters, it's difficult to shift

away from U.S. products that are tailor-made for Americans to Europe or to the domestic market. Eunice, if what China exports to us is a multiple of what we export to them, I don't see how they can say they have the upper hand, other than by saying that they're able to put their people through a lot more suffering

than we're willing to do over here because we're soft and capitalists and the West and everything else. Well,

Well, I wouldn't say that Americans are soft. Americans are super hardworking. We're pretty soft. We're pretty soft. We can't handle much hardship. In China, there have been, but Chinese people are really willing to deal with certain levels of hardship that Americans might not be. So I've already been hearing about factories saying that they're going to go into hibernation, that they're going to be paying the very minimal amount to just retain the workers because retaining the workers is really important.

as you could have, well, I'm sure you appreciate as well in the US. Like when you wanna keep your workers, but if you're willing to pay a minimum amount, then people could, what is, people say they eat bitterness and they say that Chinese people can eat bitterness really, really well.

Wow. Eunice, I want to thank you. Appreciate it. All right. We will talk more about trade with National Economic Council Director Kevin Hassett. And I love him and I can't wait to have him on. But when I said we get some spin from China, we might also get some spin from the U.S. That's what it is. Right. I mean, we just kind of got to expect it and we like it and we try to sift through it and get the signal from the noise. I don't think we like it.

I don't think we should like it. I think we should like the truth. I know, but it's the... Don't accept the spin, because what spin really means is lies. Lies. We don't like lies. You know who you just sounded like? I don't know. You just sounded like, we don't like lies. We don't like lies. We don't like lies. He said that the other night. We don't like criminals. Okay. Tease will be next.

Next on SquawkPod: Could a trade breakthrough with China be on the horizon? National Economic Director Kevin Hassett says a deal may be closer than you think. I'm hopeful that Secretary Besant, who's shown how good he can be at this by closing the Ukraine deal, is going to be able to help make progress with our Chinese friends. And I think that the fact that the tariffs came off last week shows that we're very close to making the kind of progress we need to move the ball forward.

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This is Squawk Pod with Joe Kernan and Andrew Rossorkin. China State Media reporting that the U.S. has reached out to China for tariff talks. Join us now at the latest White House National Economic Council Director Kevin Hassett. Kevin, thanks for joining us. It's good to have you on. We have our person over in China, Eunice Yun. We talked about this quite a bit earlier, the way that China is

is characterizing what happened, the possible reasons why China is characterizing it that way. And we're looking for sort of the unvarnished truth of what's going on. And we know both sides have their story. It comes on the same day, Kevin, that we're seeing that things are not so great. China said that they can easily handle what's going on, but you're already seeing some pretty large cracks.

But when they said this today, they said, oh, the United States can't take it. And they're there. They've come with hat in hand, groveling to see us. How would what's our take on that? The administration, in other words.

Yeah, our take on it is that the United States is ready for any eventuality and we're hopeful for progress. The fact is that China has been acting poorly in the past on trade. We've responded accordingly. We're very pleased to see that last week China pulled back a bunch of tariffs on U.S. products, perhaps at a show of good faith.

And so I'm hopeful that Secretary Bessette, who's shown how good he can be at this by closing the Ukraine deal, is going to be able to help make progress with our Chinese friends. Now, certainly there have been kind of loose discussions all over both governments. And I think that the fact that the tariffs came off last week shows that we're very close to making the kind of progress we need to move the ball forward. Yeah.

And you actually say you don't know whether you assume the president has talked to President Trump, has talked to President Xi, but you're not willing to say outright that that phone call occurred. But you're it's President Trump.

communicates about those. But I can tell you that I personally have not spoken with the Chinese. All right. We always get sort of a dodge. You know, the expression that success has, you know, has many fathers, but failure is an orphan. In recent days, there's been like some confusion about who's handling China. And over the weekend or previous to this, Secretary Besson said, I have talked to China, but not about tariffs. Then Lutnick said he's in charge.

And you tell me, you are saying without any question that the president has asked Besson to lead the tariff negotiations with China.

But yeah, make it 100% clear that this trade team, 100%, this trade team is unified. We get along. I've been in meetings with Secretary Luttnick and Secretary Besset and Jameson Greer yesterday, all over the place, in the ovals. And everybody collegially is divvying up on a massive amount of work.

And Secretary Lutnick and Jameson Greer are making progress with numerous countries. I think it's more than 20 now where we actually have hard offers on the table. And I spent about an hour in my office yesterday where Secretary Lutnick was talking about all the progress that they're making. And actually I want to characterize it for a second, which is that one of the top asks for us is just if we sell something in the US, then your country should let us sell it into your country too. Stop all these non-tariff barriers. We're making great progress on that.

And Secretary Bassett, as Treasury Secretary, who's, as you know, in the food chain, very, very highly ranked U.S. official. And he is the appropriate person, given the stakes, to be negotiating with the Chinese right now. And that's something that was agreed to by the president, by Secretary Lutnick, by everybody on the trade team. It just seemed...

Now, maybe he was talking at the time about whether he had engaged China on tariffs, but it seemed a little bit ambiguous when he said, yeah, I am in contact with China a lot, but about other issues other than tariffs. It wasn't a dodge necessarily, but it didn't seem like a...

like he grabbed it with both hands and said, yeah, this is up to me. And that's why I said the success has, maybe it wasn't going as quickly as hoped. And success, once again, many fathers, but suddenly failure is an orphan. So he's been in charge all along.

There are not many fathers. There's one team. And everybody talks together about what's going to happen. What are we doing? What's the position that the president thinks is best for this or that? And there's no way that as we talk about China, that you're not going to see everybody on that team in the room. Hey, Kevin, you know,

Many on Wall Street, different firms have put together real analysis, real analyses, I should say, of what the tariffs will mean for growth, for employment, for all those things. And they have made lots of different estimates and assumptions and things like that. And that's something historically that your group has done for all sorts of things. Have you done that yet? And can you share those numbers with us?

Just to be clear and to avoid any confusion, I'm director of the National Economic Council now, which is the Larry Kudlow job. I used to be the chairman of the Council of Economic Advisors, and that's Steve's job now. And Steve has a team of something like 40 PhD economists who are both already, if you go to their website, you can see they're putting out public reports about

The effects, I think the most recent one of extending the tax cuts on the economy. And I know they're doing research on tariffs. Yes, for sure. But there has not been a report. Is there a report or any genuine analysis that you are that you've been either engaged in, involved in inside the White House?

that discusses if we pursue these tariffs at these levels, this is what happens to economic growth, this is what happens to employment, all of the kind of basic things that I think the public so desperately wants to better understand.

Yeah, absolutely. 100% we have. And the way to think about it is that every year, the White House puts out a budget. And in the budget, you have to say, over the next 10 years, here's what's going to happen. Here's what growth is going to be. And here's what the president's policy priorities are. And if those policies are realized, here's what happens to economic growth. And that analysis will come out when the president releases his budget. But for sure,

Every single thing from tariffs to spending to taxes, the big, beautiful bill, all of that stuff has been very carefully, carefully bought. But just to work with the tariff. And I'll be clear, too, that the growth rate is going to be very similar or higher to what you saw when we were doing the budgets in 2017. Hey, Kevin, we're talking about trying to pay for all these other things that, you know,

In the big beautiful bill, you want to extend the 2017. I assume you want to extend it as is, but we're hearing, and it happened again today, and we had Scalise on and we had Chairman Smith on. They won't take that...

a new higher top tax bracket for people making over a million dollars of 40 percent or letting it go back to thirty nine point six. They won't take that off the table. I saw the president say he doesn't want to do that. These whenever we have these people on, they say everything is on the table. Can you provide any clarity there? Is everything on the table? Is it would you go back? And one of the main tenets of that, what you argue is a very successful outcome from that bill is

Would you change one of the basic -- I mean, that was a very important part of that bill. Are you going to go back on that? -It was a very important part of the bill. President Trump has made it clear that he doesn't support that movement. And right now, Congress is -- House and Senate are working collegially together to move towards a bill that everybody agrees on. I was there with Secretary Bessa helping to have a conversation with the majority leader and the speaker

Chairman Crapo and Jason Smith at Ways and Means just on Monday. And the amount of agreement was really close to 95%. Now there's some stuff that are House priorities that the Senate doesn't have, some stuff that are Senate priorities that the House doesn't have. And then there's our priorities, which it seems like everybody agrees with, at least when they talk to us to our faces. And so I think we're making an enormous amount of progress. And the idea that we get a bill passed,

by say early July at the latest is very, very, very likely. - Let me ask you this, Kevin, is it going to be scored whatever comes out? Are you going to have to fall back on the growth is gonna take care of any of these big numbers that the CBO scores it with? Because at this point, if you extend the tax cuts and you do all the other things that the president has been talking about,

you know, with tips and social security. I mean, the CBO, if they just...

put the numbers in, what's going to come out on the other side is a huge deficit busting plan. Now, we've had people on that just keep talking about, well, there's going to be growth, there's going to be growth, ignore that, there's going to be growth, ignore that. How are you going to pay for it? Is there any other way to do it? And tell me about Medicaid and what you'll cut, what you'll propose, and whether it's an actual cut or just a slowdown in the increase.

- Yeah, okay, so basically on the tax side, we've been working very carefully to make sure that the tax bill as designed by people in the finance and ways and means committees and approved by the White House,

satisfies the congressional rules that rely on CBO scoring. And so the chance that somebody's going to be ambushed by the CBO at the last minute and that's going to upend the bill, that's just wrong. But you do have to also keep in mind, as you do, Joe, all the time, that there's what the CBO says and then there's what the truth is in the end.

And so as an example, when we cut the corporate tax rate from 35% to 21%, the CBO told us that we were gonna crater revenue because they don't believe in Laffer curve effects. Subsequently, if you look right now, corporate revenue is about double what it was before we cut it to 21%. And so for sure, there's gonna be a lot of growth effects that accrue way more revenue. And we're already seeing it, Joe, if you wonder, like where do future taxes come from? From capital investment today, right? 'Cause then businesses are making profits in the future.

You noticed in yesterday's GDP release that equipment investment skyrocketed 20 percent and business fixed investment was up 10 percent. Those were bigger numbers than we got for the last year and a half of the previous administration. And when that stuff happens, then that's the dynamic effect that gives you more revenue. And it's already visible in the data that had the weird implications.

import glitch. But other than that, it was a really, really strong number and especially strong in the places that produce future tax revenue. You might have some real deficit. You might have some deficit hawks. And we've talked about whether any of these members of Congress on either Senate or in the House, whether they're going to get emboldened if the president's poll numbers were to go down. And are they going to you know, they're going to be much harder to whip

in the shape, some of them might not like that you just talk about growth. They may insist on some pay-fors. - Well, what did we just see? Like if you just looked at the GDP release, Joe, what did we just see? We saw reductions in government spending. We saw really pretty big reductions in government spending. You can see that our budget hawks here in the White House

are more effective than budget hawks anywhere in Washington, and they're actually getting the job done with the help of Elon Musk. And then you're also seeing something else that's not in the reconciliation process. You're seeing tariff revenue go up a lot, which is another thing that helps the fiscal situation. But in the end, if you wonder, like, what's the scorecard? Are we being fiscally sane or not? Then ultimately it's what you see in bond markets. So look at the 10-year now. It's down, what, about 60 basis points since we started this process.

and that's saving real americans tons of money and saving the federal government lots of money too in terms of the interest expense that we have so you're willing to or the administration and you figure congress is willing to enact all these new tax cuts extend the last tax cut bill from 2017 and not

worry or not try to raise revenue anywhere else that that could be a bill that's presented or where will did you did you talk about medicaid cuts what where would there would would there be cuts in medicaid there there's going to be uh reform and waste fraud and abuse it's being uh discussed and negotiated with people of the house exactly what that would look like uh it's it's being discussed to people the house of the senate but the uncertainty about uh spending reductions is

close to zero, Joe, right? Because in the instructions, they actually say how much they need to cut in the House and the Senate. And the numbers are there. You can just look at them. And they have different numbers. So maybe there's a little bit of uncertainty about where it's going to end. But when I say they're going to have a bill and it's going to pass, then that means I'm highly confident that people have found the spending reductions that they need in order to get the bill passed.

All right. Just back to tariffs before we got some data at 830, I think, Kevin, is could you see a world where and I think someone was trying to trying to sell the positives of what a lot of people are calling 100 days of chaos. But in selling the positives that the president wants to end up at a place where the worst actors are.

and you could throw China in there maybe, are isolated and maybe it's a handful and that everybody else is either zero, reciprocal or much less than what the current regime has. Is that the goal?

My briefing on all of the negotiations is that countries are opening up their markets to U.S. products. So U.S. farmers, U.S. producers are going to be able to have way more access to foreign markets. And they're doing so in a way that is making it easier for us to move the reciprocal tariffs down in the deal. And what the final deal looks like will be decided by the president. But the progress to report is extraordinary.

And if you like, the person in the middle of all that is Jameson Greer and Howard Lutnick outside of China. And I'm sure they're happy to talk to you about the progress they make today. I'm sure there'll be news by the end of the day. So you don't know who's first, if it's India or South Korea or what's going on with Japan? Can you tease us? Can you give us anything? Can you dangle? I think I know, but I can't tease. Sorry. You do think you know? I do think I know, but I'm not going to tell you. Can you give us a hint?

No, because it might not be true. We're just guessing. It's kind of like, who do you think is going to win the Super Bowl? Like, I sometimes have a strong opinion, sometimes don't. Right now, I have a strong opinion. Kevin, thanks. Thanks, guys.

Coming up on Squawk Pod, General Motors says it's making strong progress in bringing more of its supply chain closer to home. CEO Mary Barra. When you look at our overall parts situation, for the vehicles we assemble in this country, we're over 80% USMCA compliant, with the lion's share being in the U.S. So we have a lot of opportunity as we continue to work with our supply base to increase the U.S. content.

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.

USAA knows dynamic duos can save the day, like superheroes and sidekicks, or auto and home insurance. With USAA, you can bundle your auto and home and save up to 10%. Tap the banner to learn more and get a quote at USAA.com slash bundle. Restrictions apply. You're listening to Squawk Pod. Up in Andrew. Q. General Motors providing new guidance for 2025. Phil LeVeaux joins us with a very, very, very special guest this morning.

Thank you, Andrew. We've been waiting to hear from Mary Barra and she joins us now from GM's headquarters. Mary, thank you very much for joining us on a morning where you announced new guidance for 2025 and you outlined the cost impact of the tariffs that are in place for imported parts, imported vehicles, many of which you build in South Korea and import here. Walk me through. You pulled your guidance on Tuesday.

But you were working with the White House, correct? So you had a general idea, but you wanted to see when the tariff offsets were announced. And now you're telling us this is what the cost impact will be, $4 to $5 billion. Am I correct? Yeah.

Yeah, and Phil, first of all, it's great to be here and be able to talk to you from our Warren Technical Center, where people are busy coming to work right now today. So if you step back, though, we have been working with the administration since actually late last year, talking to the president and then working with members of the administration. So they understood our industry. They understood it's a very globally complex, from a supply chain perspective,

also very competitive and capital intensive. And I really want to thank the president for really working with the industry and understanding the challenges. So we had a very good idea of what some of the steps and actions would be taken. And when we learned that was actually going to happen on the day we were announcing earnings, we thought it was best to

release our very strong Q1 earnings, but then to wait a couple days so we could have the actions become official and then we could update our guidance. So that was really what drove this delay by two days because we really wanted to have a productive conversation with you and with the investment community.

Four to five billion is what you're telling your investors this is going to cost you guys. How much of that can you offset? Or do you need to move even more production here to the U.S. in order to offset that?

Well, Phil, we are working to offset that. We wanted to be very transparent with what the impact was with the current policy that's in position. As you know, there's continuing dialogue with important trading partners. So as we learn more from that perspective, we'll share that. But absolutely, we can make changes. We've already increased production and added additional people in our Fort Wayne assembly plant. So on an annualized basis, we'll be building about 50,000 more trucks.

We've been working on our supply chain since 2019 to be more resilient. And over that period of time, we've increased the parts in the U.S. by 27%. In the vehicles we build in the United States, only about 3% of that actually comes from China. So when you look at our overall parts situation, we, for the

for the vehicles we assemble in this country, we're over 80% USMCA compliant, with the lion's share being in the US. So we have a lot of opportunity as we continue to work with our supply base to increase the US content. You'll see more announcements from us now that we have this clarity to be able to reinvest in the US.

And, you know, we actually have been doing that from a manufacturing perspective as well. Over the last couple of years, we added two battery plants in this country, you know, which is technology that's for the future. And we have a third one underway.

Sure. I don't dispute that you're doing all of this, Mary, but let's be honest here. You're sitting across from the president in the Oval Office. I'm assuming that at some point he has said, bring your plants back from Mexico. Has he said that to you? And what have you said to him? Why don't you bring a plant back from Mexico?

Well, Phil, I think we've had many conversations, and I share the president's goal to have a strong manufacturing base in this country, to increase manufacturing jobs in this country. And I think it's important from an economic security perspective, as well as a national security perspective, and to give us a level playing field. Because I can't speak to the broad industry, but when we look at the auto industry, it's been decades of not having a level playing field around the world. So we're working with a footprint that's been in position for years.

you know, in some cases, 20, 30 years. But we are making a commitment that we are going to bring more production back to this country to build on what we already have. But in turn, let me get to the point here, Mary, because a lot of people hear that answer and they'll say, yeah, you're dancing around the question. Are you going to bring plants back to the United States?

Phil, we have a lot of plants. We have more assembly plants in this country already. We have over 50 plants that are not only final assembly, but component plants and part distribution centers. We're going to leverage that footprint that we have.

because we have the ability to add capacity to many of those plants. So we can do this efficiently, and it's going to allow us to do this more quickly than if we were going to start with a greenfield. So right now, we're going to leverage the assets that we have, and we're working on plans. I don't have anything specific other than what we've done in Fort Wayne already, but you'll see more announcements coming from us of what we're going to be doing to increasing production in this country, leveraging the strong manufacturing footprint we already have.

Mary, you've said that you're going to keep your prices in check, at least for now, and not pass along the tariff costs in the form of higher MSRP for your vehicles. How long can that continue? And at what point do you expect that it's only natural that you're going to see with less supply out there that there are going to be dealers who will raise prices?

Well, you know, we have always worked to be very competitive from a pricing perspective and leveraging our strong portfolio. You know, I'm very proud in this first quarter, we grew two points of market share. So we're going to continue to leverage our strong products across Cadillac, GMC, Buick, and Chevrolet. And we will be competitive in the marketplace. But right now, as we look going forward, we think the pricing environment is going to be much where it is right now.

So you don't expect prices to rise? I just want to be clear here, because that's been the theme or the line that's been out there for some time, that the longer we go with these tariffs, the more we will see prices rise, not just for General Motors, but for all automakers.

Well, from a pricing perspective, again, we're going to remain competitive and we're going to remain disciplined. We are not going to do what we've seen others do, especially in the EV space of putting on very high incentives to move that. I think, again, we're going to leverage our strong base. We're going to be competitive in the market. But as we look forward with the guidance that we provided, we're assuming a pricing environment that's similar to what it is today.

Mary, you import a number of vehicles from South Korea. That's a big base for you for manufacturing, both in terms of the tracks, the blazer. Are you slowing down those imports or are you bringing in the same amount and saying it is what it is? We have to pay a 25 percent tariff on these vehicles.

Right now, we're evaluating it based on we know there's conversations going on between the U.S. and South Korea, so we're going to evaluate what we're doing. These products are at the low end of the market and are really a value-based product. So we'll evaluate what the right steps are to take with that when those trade discussions are completed that we expect

will be part of what's happening in this 90-day delay. So we'll evaluate that. So I'm not, we're not jumping to any conclusions. We're doing things when we know we have certainty. And I want to thank the president for the certainty he gave us, because that's allowing us to make a lot of decisions in North America and continue the work we've been doing from a parts perspective over the last couple of years.

Mary, last question. As you guys have had conversations, as you have had conversations with the president and you guys want to level the playing field, have you ever said to him, stop the Chinese automakers and the parts suppliers from building plants in Mexico? It's the back door into the U.S. And has he said, yes, I plan on having Mexico stop the Chinese from manufacturing there?

Well, I think when you look at the competition that we have around the globe, it's fierce. What I've always said is if we have a level playing field, and I think when you look at what's happening with some of the Chinese OEMs, there's a lot of subsidies going on from a

from where they're growing globally, and they're trying to leverage the supply that they have, oversupply and overcapacity that they have in China. So I view them as a very fierce competitor, but I also think that if they were going to be able to come into the United States, it has to be a level playing field, and subsidies and incentives aren't going to provide that. So my focus is on really...

If we're going to compete, let's compete in a fair environment. Mary, thank you very much for joining us today and for giving us a little clarity in terms of how you're planning on dealing with the tariffs on autos. That's Mary Barra, the chair and CEO of General Motors, joining us from the company's Warren Technical Center just outside of Detroit. Guys, I'll send it back to you.

Thanks, Phil. In front of a beautiful Corvette, by the way, which I think is made in Kentucky, right? Yep, that is correct. Little red Corvette. Yeah, they're...

Definitely. They are head turners, Phil. Those are head turners. Every time I see one, I'm like, I don't know. It's got sort of a Ferrari feel to it. I've thought about those. I got to admit it. Right. This year's vets are or was it last year? I'm not sure. But I'll say white ones, blue ones, red. They you notice, Phil, they're head turners. They are head turners, have been head turners for years.

That's the podcast for today. Thank you for tuning in today as always. Squawk Box, our three-hour TV broadcast, is hosted by Joe Kernan, Becky Quick, and Andrew Ross Sorkin. You can catch them live every weekday morning on CNBC. The best parts of that TV show are...

always here on SquawkPod, and you can find us as long as you follow us wherever you're listening now. We have a lot of treats coming from the Berkshire Hathaway annual meeting this weekend, so stay tuned for that. You wouldn't want to miss an episode. We'll meet you right back here tomorrow with some preview of Warren Buffett. We are clear. Thanks, guys.

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