The Trump administration's trade dispute with China may have quieted down, but CNBC's Jim Cramer argued on Thursday that it is far from over.
"We've opened up a new front in the trade war, and while it's quieter than all of the bombast about tariffs that had people freaking out, there are still a ton of companies that can get hurt here," the "Mad Money" host said. "The new front in the trade war? Technology."
The U.S. Commerce Department's Monday ban on selling U.S. products to Chinese smartphone maker ZTE was "just the tip of the iceberg," Cramer said.
"I think it's pretty transparent. It's attempt to retaliate for the actions our government took earlier this week," Cramer said. "This deal has been approved by every other relevant antitrust agency on earth."
With shares of Qualcomm and NXP down over 4 and 5 percent respectively after the ruling, Cramer credited Chinese officials for hitting U.S. companies where it hurt — in the stock market.
"From a legal perspective, this is one of the most ridiculous things I have ever seen, but from a geopolitical perspective, it's a smart move — the Chinese know how to play hardball," he said.
Still, Cramer worried about how the tit-for-tat battle could affect the rest of the technology sector now that the focus is squarely on hitting tech where it hurts.
U.S. regulatory agencies can keep chipping away at Chinese companies, but two can play at that game, the "Mad Money" host said.
"If this is the new normal, if the Chinese will block any semiconductor merger, that's going to be brutal for the stocks in the group," he said. "It makes the whole cohort less valuable."
But in addition to negative merger reviews, telecom tensions, and restrictions on exports, China had one key strategy that Cramer was particularly concerned about: boycotts.
"The Chinese government loves to organize boycotts," Cramer said, adding that past tensions with Japan and South Korea have led to Chinese boycotts of Japanese and South Korean products.
"As I see it, this is China's ultimate weapon," the "Mad Money" host said.
President Trump could tell U.S. consumers not to buy Chinese goods, but in a democracy, no one has to listen. But Cramer noted that China's government wields more power.
"Do you really want to be the one guy breaking a boycott in an authoritarian communist state? I didn't think so," Cramer quipped.
"Here's the bottom line: just because we're not talking about tariffs every day, that doesn't mean our trade dispute with China is somehow over," the "Mad Money" host said. "It's still very active, it's hot, it's just that the action has shifted to the tech front for the moment. You need to watch this very carefully or else you might end up like the shareholders in Acacia or Oclaro or NXP Semi or Qualcomm. And that's a very difficult place, indeed."