Jim Cramer says this is the easiest way for the market to get out of its tariff 'nightmare'
CNBC's Jim Cramer said Thursday the court fight over President Donald Trump's tariffs temporarily injects more uncertainty into the stock market — but, he argued, it ultimately could be a gift to investors who worry about the effects of the White House's trade policy.
"Even if you believe in fair trade, not free trade, as I do, you have to wonder how we're going to get any meaningful deals now that our trading partners know the courts might invalidate the whole tariff agenda," Cramer said on "Mad Money." "In that sense, but only in that sense, maybe the judiciary shooting down the tariffs is the easiest way out of this nightmare."
Cramer's comments came after the S&P 500 and Nasdaq Composite both ended Thursday's session up 0.4%, well off their highs of the session. Early trading action on Thursday morning suggested Wall Street was headed for a strong day, thanks to artificial intelligence bellwether Nvidia's better-than-expected earnings report the prior evening and a ruling from the U.S. Court of International Trade that struck down most of Trump's tariffs.
However, the positive sentiment fizzled as the day went on, Cramer contended, because uncertainty over the legal challenges to the tariffs increased. The Trump administration vowed to fight that lower-court ruling, and said it could ask the Supreme Court to pause the decision as soon as Friday. Then, on Thursday afternoon, an appeals court ruled in favor of the White House and temporarily paused the Court of International Trade's ruling.
"Right now, the administration has to hope that our trading partners believe the Supreme Court will uphold the tariffs, or that another lawsuit against the next iteration of tariffs will somehow fail. Because if the judiciary shoots down the tariffs, Trump has zero cards to negotiate new trade deals," Cramer said.
The reason why that matters for the stock market is hope that the U.S. would soon strike trade deals with many countries — leading to lower import duties and more clarity for businesses and consumers alike — has helped fuel the S&P 500's rally in recent weeks. The index is up nearly 19% from its April 8 close, the day before Trump voluntarily paused most of the "reciprocal" tariffs that drove the market into a four-day plunge.
"Then again, if the [Supreme Court justices] do side against the White House, we don't need to worry about retailers raising prices across the board to pass on the tariff pain," Cramer said.
When asked to respond to Cramer's remarks, the White House pointed CNBC to comments made earlier Thursday by press secretary Karoline Leavitt. "The Supreme Court must put an end to this," Leavitt said at a press briefing. The judges sitting on the U.S. Court of International Trade "are threatening to undermine the credibility of the United States on the world stage," Leavitt also said.Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest smarter.Disclaimer
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wall Street Journal
32 minutes ago
- Wall Street Journal
JGBs Mixed; Trade, Geopolitical Tensions May Support
0014 GMT — JGBs are mixed in price terms in the early Tokyo session, but may be supported by trade and geopolitical tensions that typically enhance the safe-haven appeal of sovereign debt. U.S. President Trump said on Friday that he would increase tariffs on imports of steel and aluminum to 50% from current 25%, effective June 4. Meanwhile, Ukraine launched drone attacks on four military airports inside Russia, destroying more than 40 warplanes. Five-year JGB yield is unchanged at 1.015%; 30-year yield is down 1.5 bps at 2.950%. (
34 minutes ago
GOP budget battle over ‘Big Beautiful Bill'
Republicans are squabbling over whether President Trump's 'Big, Beautiful Bill' will boost the economy, or add trillions to the nation's debt. ABC News' Selina Wang reports.
Yahoo
34 minutes ago
- Yahoo
Small businesses struggle under Trump's tariff whiplash: ‘I'm so angry that my own government has done this to me'
For some small businesses, the last week brought even more twists and turns to the past two months of President Donald Trump's chaotic tariffs. The situation was already confusing, with stops and starts of tariffs at different levels. Then on Wednesday, a US court said Trump overstepped his authority in imposing most of those import levies – only for an appeals court on Thursday to pause the previous court's ruling. The confusion has made it challenging for some small companies to plan, business owners told CNN. In certain cases, they have had to consider changing their product strategy, looking into shifting their supply chains, reducing staff hours or delaying products. 'My fear is, if this continues, there's going to be like the mass extinction of small businesses,' Julie Robbins, CEO of Ohio-based guitar pedal maker EarthQuaker Devices, told CNN. Trump announced blanket tariffs across the globe on April 2, and since then, his plans have changed on a regular basis. In early April, he issued a 90-day pause on reciprocal tariffs almost everywhere except China. Then, after ratcheting up total tariffs on Chinese imports to 145%, he declared smartphones and certain other electronics would be exempt from the reciprocal tariffs. The US and China agreed in May to roll back reciprocal tariffs for 90 days. And in late May, he threatened smartphone makers like Apple with 25% tariffs if they don't make their phones in the US. He also agreed to push back levies on imports from the European Union until July 9. Those are only some of his changes, which can come at any time of day via the White House, social media posts or other avenues. The whiplash has been hard for companies to keep up with. Even major brands like apparel giant Gap are feeling the impact of tariffs, but small companies with far fewer resources are in an even tougher spot. The National Federation of Independent Business Small Business Optimism Index fell by 1.6 points in April, dipping below the 51-year average for the second consecutive month. The organization's chief economist, Bill Dunkelberg, cited uncertainty as a 'major impediment' for small business owners in a press release. 'It's the sort of more smaller, kind of more niche… brands that are going to really, really get hit by this,' Jack Leathem, an analyst at market research firm Canalys, told CNN in April. Some small business owners have had to make difficult decisions as they've grappled with the impact of tariffs. EveAnna Manley, whose company Manley Labs makes high-end electronics for recording studios, has had to cut her employees' hours by 25%. The reciprocal tariffs that China imposed on the US have been particularly challenging, she says, since China has become a major market for her business. Manley says it took 'decades' for her to 'get the best Chinese importers.' Overall, Manley Labs' sales are down more than 19% compared to last year, she told CNN, which has frozen the company's product development efforts. 'It's just a freaking mess right now,' she said in late May, before this past week's court rulings on Trump's tariffs. 'And I'm so angry that my own government has done this to me.' The best thing small businesses can do right now is to be flexible and diversify their sourcing and procurement strategies, says Tala Akhavan, chief operating officer of Pietra, a platform that helps brands with sourcing, production and logistics among other services. That's what Intuition Robotics, which makes a home robot designed to be a companion for older adults, is doing, according to chief strategy officer Assaf Gad. The company also makes money off its digital subscription accounts, according to Gad, giving it the flexibility to look into a 'plan B' outside of China for producing the company's hardware. Sudden changes in tariff policies haven't really impacted the company's decisions because it's planning for the next nine to 12 months rather than the short term, he said in mid-May. Trump's tariffs have encouraged Gad to think about expanding Intuition Robotics into international markets. 'Maybe this is also a good time to say, 'Let's not put all the eggs in one basket,'' he said, 'and, you know, start looking on other kind of territories that will reduce the risk for us going forward.' But for some companies, finding a plan B isn't so easy. That's the case for Sarah O'Leary, CEO of Willow, which makes wearable breast pumps and accessories. As a medical device company, Willow can't simply just move its manufacturing, O'Leary told CNN. The company had to pause exporting one product it produces in China for postpartum recovery at one point because it became too expensive. The ruling on Wednesday aiming to block many tariffs brought some relief, O'Leary said in an emailed statement on Thursday evening. But she acknowledged that there's still 'so much uncertainty,' adding that 'the chaos will persist.' Any tariffs, even low ones, would be difficult for a small company like hers to absorb, she said in mid-May. 'We don't build our products with that much margin,' she said. 'And so, unfortunately, we are in a position where we have to evaluate what we can do to survive in those contexts.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
