Market action signals the White House should change course on tariffs, Jim Cramer says

CNBC’s Jim Cramer suggested tariffs dictate recent market action, saying stocks indicate that the White House should take a different approach to the issue.

“Right now, the stock market’s saying that President Trump needs to change course on how he tries to implement the tariffs,” he said. “It’s screaming that we have the wrong approach, and the president should not ignore that scream, because that’s how you end up in a recession.”

President Donald Trump’s tariff policy wavered on Tuesday, as he initially said he planned to increase tariffs on Canadian steel and aluminum imports to 50% on Wednesday, but the White House went back on the assertion a few hours later. The back-and-forth made for a volatile session, bringing the S&P 500 at one point to the brink of a correction — or a decline of 10% from a recent high. The broader market index managed to finish the day down 0.76%, while the Dow Jones Industrial Average lost 1.14% and the tech-heavy Nasdaq Composite declined 0.18%.

While Cramer said he’s not necessarily opposed to the broader trade goals of Trump’s tariff policies, he noted that there are issues with them. He noted that there’s not currently another cheap source of aluminum available to the U.S. A huge increase in aluminum prices could lead to dramatically higher prices of cars and trucks and issues for the auto industry, he continued.

Cramer also pointed out that Trump’s tariff approach has started to scare consumers, and the White House hasn’t made it clear why tariffs would positively impact them. He added that there seems to be a marked decline in small business optimism. Corporations are starting to project consumer pessimism, he continued, and mentioned recent weakened guidance from Delta, American Airlines, Verizon, Dick’s Sporting Goods and Kohl’s.

“Now, we’re not a manufacturing economy. We’re a service economy,” Cramer said. “That’s why it stings when you see these retailers, telcos and airlines linking the negativity of their customers to political actions emanating, yes, from the White House.”

“After President Trump threatened to use his executive powers to retaliate with a colossal 50 percent tariff against Canada, Ontario Premier Doug Ford spoke with Secretary Lutnick to convey that he is backing down on implementing a 25 percent charge on electricity exports to the United States,” White House spokesperson Kush Desai said in an email. “President Trump has once again used the leverage of the American economy, which is the best and biggest in the world, to deliver a win for the American people. Pursuant to his previous executive orders, a 25 percent tariff on steel and aluminum with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12th.”

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