Jim Cramer: We Have to Walk Away to Get a Great China Trade Deal

U.S. negotiators should walk away from trade talks with China, CNBC anchor Jim Cramer said Monday morning.

Talks between the U.S. and China have reportedly stalled as China refuses to publicly commit to purchasing $50 billion of agricultural goods and its negotiators insist that the U.S. drop tariffs already in place as part of a ‘phase one’ preliminary trade deal.

Cramer argued that if the U.S. threatened to stop talks, China would be forced to compromise and begin accepting U.S. terms for a deal.

“If you saw [Treasury Secretary Steven] Mnuchin come out and say, ‘You know what? I’m finished with these guys,’ then what would happen is that we’d see a real deal,” Cramer said.

Secretary Mnuchin is thought to be a China ‘dove’–meaning, more open to a permissive deal with China–in the trade talks and U.S. Trade Representative Robert Lighthizer is considered a China ‘hawk.’

“We have to walk away to get a real deal,” Cramer said.

Cramer also argued that U.S. mainstream media bias against Trump was distorting U.S. public perceptions–and perhaps Chinese perceptions–about the trade dispute.

“The hand of Xi keeps weakening but the mainstream media keeps talking about it getting stronger,” Cramer said. “I think that Trump knows that is not the case. All of his trade advocates know that is not the case.”

In particular, U.S. media is exaggerating the strength of the Chinese economy, Cramer said.

“Right now, I really do not think China is doing well economically. And we are. But the mainstream media says that Xi is a great Chinese man with great democratic leanings, member of the WTO, and we have a mad man,” Cramer said.

In response to a question from Becky Quick, Cramer said he doubted the stock market would sell off sharply if trade talks were called off.

“I don’t think it matters. All it does is strengthen his hand,” Cramer said.

“China is the enemy except for the mainstream media that just loves Xi. They think he’s Alexander Hamilton meets George Washington. The guy is a communist dictator who is killing people,” Cramer said.