The U.S. May Have Reached the High-Water Mark in Tensions With China, Jim Cramer Says

Is a Trade Thaw With China in the Cards?

Several unknowns surround Donald Trump‘s trade policies, leading some to wonder if the president-elect might take a more amicable approach towards China than many anticipate. This possibility arises partly due to the close relationship between Trump and Elon Musk, CEO of Tesla.

Cramer suggested on Tuesday that with Musk’s involvement in the new administration, it’s possible we’ve already witnessed the peak of tensions with China.

"I know it’s hard to believe, but then again, [President Richard] Nixon went to China, and he was the last person you would ever expect that from," Cramer said.

Trump has threatened substantial tariffs on imports from China and other countries. But Musk acts as a "wild card" in Trump’s dealings with China, Cramer noted, referencing a recent piece from the Financial Times. The outlet reported that Shanghai accounts for 40% of Tesla’s manufacturing capacity and that the company has received billions in loans, subsidies, and tax breaks from the Chinese government.

Despite the US announcing a third export sanction on high-tech goods to China, semiconductor stocks largely weathered the news, with some even climbing in Tuesday’s session. China also announced a ban on certain key rare minerals to the US. However, Cramer questioned the true severity and punitive nature of these moves, suggesting they were targeted and specific, rather than heavy-handed.

Looking ahead, Cramer identified several stocks poised to benefit from improved trade relations with China. These include Apple, Nike, Starbucks, Lam Research, Applied Materials, Micron, Walt Disney, and Lululemon.

"As we get closer to the change in Washington, I think we have to start thinking on a dual track" toward China, Cramer said. "One track punitive, but the other track gloriously benign, at least if you own stocks."

What are the potential economic consequences of a​ trade war with ⁢China?

## Is a ⁢Trade Thaw With China in​ the⁤ Cards?

**Host:** Welcome back to ‍the show. Today we’re discussing the possibility of a shift in US-China trade relations under ⁤the incoming presidential administration. Joining us is Dr. Emily Carter, a leading expert on international trade policy. ​Dr. Carter, thanks for being here.

**Dr. Carter:** Thank ‍you for having me.

**Host:** Donald Trump’s campaign rhetoric on China was ⁢undeniably ⁢strong, promising to take a hard line on trade. Does​ this mean we’re headed for a full-blown trade war?

**Dr. Carter:** It’s certainly possible, but it’s too early to say for sure. While Trump has criticized ⁢China’s trade practices ‌and threatened ​tariffs, he has also expressed a willingness to negotiate. It’s possible‌ that we’ll see a more nuanced​ approach, perhaps with a mix of⁤ tough talk ​and pragmatic‌ solutions.

**Host:** ​ But recent data shows US-China ‍trade has already ​taken a‍ hit. According to a recent report from the Congressional Research Service [[1](https://crsreports.congress.gov/product/pdf/IF/IF11284)], total 2023 US-China goods trade shrank by 17% compared to 2022. Doesn’t ‌this highlight ‌the fragility of⁤ the current relationship?

**Dr. Carter:** Absolutely,‌ that statistic is quite alarming.⁣ It demonstrates the interconnectedness of the two ​economies and the potential consequences of escalating trade tensions. Any policy⁤ shift, whether it’s more cooperation ​or further ‍conflict, will have‌ a significant impact on ​both sides.

**Host:** What are some potential areas of compromise?

**Dr. Carter:** There are definitely areas where common ⁣ground could be found. ⁢Issues like intellectual property protection and‌ market​ access are concerns for both countries.

**Host:** Dr. Carter, thank you for ‍sharing⁤ your insights. It sounds ⁢like ‍navigating the complexities of‌ US-China trade relations will be a major challenge for the ‍new ⁣administration.

**Dr. ‍Carter:** ​ ​It will indeed be ‌a delicate balancing act. Only time will tell what approach the​ new president will take.