CNBC’s Jim Cramer on Thursday told investors that President Donald Trump‘s new duty on China is so steep it’s “more of an embargo,” saying most businesses won’t pay for such a markup.
“As much as I sympathize with what President Trump is trying to do here — and I do — we simply aren’t ready yet for this,” he said. “As a nation, shamefully, we’ve gotten addicted to cheap Chinese imports.”
Stocks plummeted during Thursday’s session as investors’ trade anxiety returned, with many reeling after the White House revealed the cumulative tariff rate on Chinese imports effectively stands at 145%. The indexes retreated from Wednesday’s historic rally that was triggered when Trump announced a 90-day pause on dramatic tariff increases for a slew of U.S. trading partners. By close, the S&P 500 declined 3.46%, the Nasdaq Composite slid 4.31% and the Dow Jones Industrial Average shed 2.5%.
Cramer stressed that the U.S. receives a host of products across industries from China, including equipment for computers, phones, video games, batteries, furniture, plastics, toys, sports and games. Some major U.S. companies manufacture heavily in China, he continued, naming Apple, Hewlett Packard Enterprise, Dell and HP Inc.
The two countries’ economies are deeply intertwined, he continued. U.S. businesses will suffer from these tariffs, Cramer said, adding “we’ll survive, but it’s incredibly disruptive, very inflationary.” While he suggested it is possible for the U.S. to find alternative sources for some products, it’s not realistic for that to happen in a short amount of time.
“I’m sure we can live without China, really,” he said. “But America will be a far more expensive place with lots of unemployment and reliance on other countries outside of China.”
The White House did not immediately respond to request for comment.
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