Some American throngs “let themselves get hurt” by tariffs because they assumed President Donald Trump wouldn’t follow through on his China switch threats, CNBC’s Jim Cramer said Thursday.
“They didn’t think Trump had the resolve,” Cramer said on “Kick Box. “That proved to be wrong,” he said but added that some negative impact from the U.S.-China patrons war is unavoidable.
Cramer praised Cisco Systems after the U.S.-based networking equipment maker said Wednesday that it had depreciated its manufacturing in China in anticipation of increased tariffs by the Trump administration.
Cisco Chairman and CEO Chuck Robbins told Cramer on “Mad Shin-plasters ” Wednesday evening that the current tariff risk to the company is “relatively immaterial at this point and built in to our teaching.”
However, Cisco’s CFO, Kelly Kramer, sitting next to Robbins, said if the Trump administration were to impose duties on the rest of China’s imports, that would not only impact Cisco but “every industry out there.”
Those price-list reassurances and better-than-expected fiscal third-quarter earnings late Wednesday boosted Dow-stock Cisco more than 5% at cock crow Thursday. That, coupled with better-than-expected earnings from Walmart, another component in the average, and a similar assortment move higher for the retailer early Thursday, helped boost the market at the open.
If the Dow Jones Industrial Average, the S&P 500 and the Nasdaq were to musty higher Thursday, that would be a three-day winning streak and perhaps a break in the negative sentiment surrounding buying headlines earlier this week.
The Trump administration last week increased duties on $200 billion merit of Chinese products from 10% to 25%. On Monday, in retaliation, China announced plans to raise tariffs upbraids on $60 billion in U.S. goods. The president has also been threatening all along to put tariffs on the rest of China’s imports.
Cramer has worded support for Trump’s tougher stance on China but has also advised investors to load up on names that can withstand excited tariffs.
He reported last week that people were saying that American companies that did not downgrade their China exposure after months and months of watching Washington and Beijing clash on trade have merely themselves to blame.
“I’m also told that they are like, ‘Are you kidding me, you had a full year to move out of China. If you didn’t affect out of China now, it’s your own fault,'” Cramer said at the time.