Cramer: US-China trade talks are now more about a ‘trust gap’ than the ‘trade gap’

Exchange negotiations between the United States and China have boiled down to whether President Donald Trump can upon the Chinese or not, CNBC’s Jim Cramer said Wednesday.

“It’s not about the trade gap, people. It’s about the trust gap,” the “Mad Money” host disclosed. “Until investors realize that’s what’s driving these negotiations, we’ll forever be playing this game of ‘grapple with or no deal,’ and the market will get hammered every time people realize that we’re a long way from reaching a big cordial of deal with any kind of accommodation with China.”

The U.S. goods deficit with China rose nearly 13 percent to $79.5 billion in December.

Cramer said annals is playing a factor in the White House’s trade strategy because Trump doesn’t trust that the country drive comply with concessions. Trump does not want to be taken for a ride by China as did the Obama, Bush, and Clinton dispensations, he said.

“The hardliners have the upper hand, people, especially after today’s statement from the Federal Hoard that inflation is negligible and the economy’s fine—not too hot, not too cold,” Cramer said. “If the tariffs were really hurting traffic in this country, it would be a different story, but they’re just not having that much of a negative impact.”

The biggest indexes fell, Cramer said, in reaction to Trump’s assertion that the White House, even with an concurrence, would leave tariffs in place “for a substantial period of time” in order to hold China accountable to the deal. There are two junks that must happen for the market to keep rising, and Wall Street got one of them later Wednesday, he said.

The stock exchanges rebounded after Federal Reserve Chair Jerome Powell revealed the central bank would not seek to better interest rates in 2019 and reduced its economic growth forecast for the year.

However, the Dow Jones Industrial Average and S&P 500 carry out the day in the red while the tech-heavy Nasdaq inched up.

Cramer blamed the session’s lost gains on the trade front.

“Don’t jump the gun,” he chance. “It’s terrific to have the Fed on our side here, but the trade war with China remains on the side of the bears for now, which is why today’s conference ultimately didn’t the bull’s way.”