SOTS 2nd Hour: New Canadian Tariffs, AI’s Impact to Hollywood, Buzzkill for Coffee Drinkers? 07/11/25

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Carl Quintanilla (1:09)

Good Friday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Contessa Brewer here at Post 9 of the New York Stock Exchange. Sarah Eisen is the morning off. Markets coming off Thursday's all time highs. All sectors red for now except for consumer discretionary. Yields are up pretty much across the curve. You got the VIX re-approaching 17 today. This morning, AI's impact in the real world. We will talk about new steps that the street and the media industry are taking to integrate AI and what that means for human employees. And then Yale management's expert Jeffrey Sonnenfeld is with us to weigh in on this analyst's call for Apple to consider replacing Tim Cook.

David Faber (1:46)

First, though, let's start with Washington, DC. This is the market, of course, is dealing with a whirlwind of tariff announcements. Could even see more today. Megan Casella joins us now. Of course, things move so fast and she keeps track of it all for us. Megan, what do we know?

Megan Casella (2:02)

David, I try my best to stay on top of it all, but it's been significant escalation last night and, really, this week, overall, the first new piece is the president now threatening to raise tariffs against Canada to 35 percent, up from the 25 percent level where they are now. Now, an administration official did tell me that exemptions for USMCA-compliant goods and the lower 10 percent tariff for energy are likely to stay in place. The official says it is fluid, and you can see here how many different tariffs now Canada is facing on all of its exports to the US. Canadian Prime Minister Carney responding overnight to the new threat, saying Canada will continue to negotiate and that Canada is strengthening its partnerships throughout the world. So worth noting there that the largest buyer of US goods is looking to build closer ties with other markets amid all of this tariff back and forth. Then separately, Trump also told NBC News yesterday that he's considering raising that universal baseline tariff from the 10 percent level where it's been since April to 15 or even 20 percent. So if that happens, guys, that means everything US companies and consumers buy from abroad would cost at a minimum an extra 15 percent from tariffs. As for what's next, Trump threatened again yesterday to send a new tariff threat to the EU. So we wait to see if that might come today. And then just to sort of take a step back, I know there's been a lot of headlines, but this week began with the president postponing that July 9th deadline for the country-specific or reciprocal tariffs to kick in. It looked like a potential softening of his trade stance. But since then, we've seen new tariff threats for Canada and Brazil, neither of which were previously facing reciprocal tariffs. A 50% tariff on copper this week, a potential 200% tariff coming on pharmaceuticals, and now this possible doubling of the baseline tariff. So to sum it all up there, it's been a vast expansion, at least in rhetoric, of the trade war on multiple fronts. Guys?

Contessa Brewer (3:55)

So, Megan, I'm just curious, because we've seen some different positioning from the White House on this. Is there concern, do you sense, from the administration, not the president himself, but those around him, about what the uncertainty, the volatility, the yes, the no, the back and forth might be doing to the brand of the United States when it comes to these trading partners?

Megan Casella (4:24)

Not that we're picking up on as of now. That's something that's a little bit different from the first term. Is there is real unity within this White House on this. And what it appears is that the uncertainty by all accounts is by design. And they like that. We do know some officials are really focused on really wanting to get these deals. Scott Bessett has been out there. Kevin Hassett has been talking about getting deals done. But they are very much behind the president and saying we can't get ahead of him.