President Donald Trump took a major political risk after his public standoff with Mexico, which ended with a cancellation of a meeting between him and the country's president, CNBC's Jim Cramer said on Friday.
On Thursday, the White House suggested imposing a 20 percent tax on goods imported from Mexico to pay for a wall at the southern U.S. border as Mexican President Pena Nieto continues to say he will not foot the construction bill. The move comes as a rift between the two countries widened on Thursday as a meeting between the two presidents was canceled.
Nieto said he would not attend the planned meeting. Trump said on Thursday via Twitter "it would be better to cancel" a meeting with the Mexican president if he were unwilling to pay.
This marks the first serious splinter in US-Mexico relations the U.S. has seen in some time, Cramer said, and could cause more Republicans in Congress to break ranks, as Sen. John McCain has on key issues, including on trade deals with foreign countries.
"The 20 percent tax, the idea that this is not about jobs as much as it is just a spat between to countries that have had very good relations. The spat should be about NAFTA. The spat should be about the way we set up trade with the Mexicans," Cramer said on "Squawk on the Street."
"I don't think the spat should be about not talking to each other, which is what Vicente Fox was saying," he said, referring to an interview on CNBC's "Squawk Box," when former Mexican President Fox blasted Trump, calling him a "child."
Cramer said Trump is beginning to learn that other nations can't be bullied, and when attacked, they push back. He said they have 'their own nationalist political dynamics."
Moreover, Trump's plans are likely to hit a few road blocks from unexpected places, Cramer said, adding "I believe Mexico has some friends in the Senate."