China Retaliates Against U.S. Tariffs, Palantir Soars, Merck Tumbles 02/04/25

SPEAKER_1 (0:00)

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SPEAKER_2 (1:01)

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David Faber (1:29)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (1:41)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Futures are mixed, yields up as China retaliates a little with tariffs on American oil, coal, net gas, some ag equipment. Earnings get more attention today with some lower guidance at firms like Merck and Pepsi. Our roadmap begins with the trade tit for tat. China does hit back with tariffs on the US., including Targeting Energy and Google.

David Faber (2:07)

Plus, we're keeping an eye on shares of Palantir. Why? Well, they are surging after the company posted a strong outlook on what it calls untamed AI demand. Its CEO expecting a company windfall from Elon Musk's government cost-cutting efforts. And there are also any number of other corporate earnings that we'll try and get to this morning and focus on Pepsi, Merck, Pfizer, PayPal, Spotify shares up about 8%. Those were all amongst the names that have reported this morning. Alphabet, by the way, after the bell.

Carl Quintanilla (2:36)

Let's begin with China, though, retaliating against the president's tariffs. Beijing says beginning February 10, it will impose additional tariffs on some imported US goods, 15% on coal and liquefied Nat gas, 10% on crude oil, farm equipment, pickup trucks and some other vehicles. Other actions include tightening export controls on critical minerals used in things like smartphones. China also announcing an antitrust probe into Google, Jim. They're adding PVH and Illumina to this unreliable entities list.

Jim Cramer (3:05)

I thought these were funny.

PVH, one of the buttons on the shirt rung. Illumina, there's two other companies that do what they do. Coal, very much in demand in Western Europe. They're fighting natural gas demand everywhere. Minerals, okay, they've already had pretty tight controls. So I look at this and I say, all right, what they're saying is, we don't want to go to war. So what we're going to do is demonstrate that we're going after some things, that we know they're not important to you. We know it doesn't hurt any aspect, but we can't lose face here. We got to do something. Look for natural gas is the funniest one, because the demand for look for natural gas is insane. So you have it, natural gas is name up. So you have a statement which basically says, Mr. President, we heard you. Maybe we ought to sit down and talk. Now there are, some people would say appeasers. I don't want to use that strong term. There are people within the government who very much want to deal. I think that the president very much wants to deal. They can raise the, certainly raise from 10 to 25, but David, PVH.

David Faber (4:10)

Four and a half billion dollar market cap company.

Jim Cramer (4:12)

Tommy Hilfer. That was kind of weird.

David Faber (4:14)

I don't have any idea. The sweaters?

Jim Cramer (4:15)

Is it about sweaters? Is that what it's come down to?

Carl Quintanilla (4:17)

Well, it's designed not to escalate, like you said.

Jim Cramer (4:20)

Right, I mean, this is, if you had to pick something that would make, that would say, you know what, we're not going after you. By the way, farm equipment, deer chargers, there's just a fortune everywhere, so that's the tariff story.