"But, honestly, I'm not sure interest rates are what we need to be super-worried about here," the "Mad Money" host said. "I think the bigger short-term worry here is a possible slowdown caused by new barriers to trade that we're erecting with China now and perhaps many other countries later."
He went on: "New barriers to trade are being imposed right when they can do the most damage to our economy by boosting inflation, which in turn will force the Federal Reserve to tighten faster than it might otherwise need to."
Even though Cramer supported the United States' push for better trade deals with China, he argued that the tariff battle was much more concerning than rising Treasury yields.
He recalled what Goldman Sachs CEO Lloyd Blankfein told CNBC's Wilfred Frost last week: that 10-year Treasury rates are heavily influenced by central banks, so they don't reflect economic issues like growth and inflation like they used to before the 2008 financial crisis.
"I think Lloyd's right," Cramer said. "That doesn't mean we'll be just fine when the 10-year crosses the 3 percent Rubicon. I think we will sell off."
He continued: "What it does mean is that this sell-off will likely be a buying opportunity, because while so many experts tell this story about the dangers of the 10-year going over 3 [percent], I think could be ... a tale told by an idiot, full of sound and fury, signifying nothing."
Jordan told Cramer that business was strong and loan demand was high at these levels and would surely be high at increased levels as well. The two later joked that they were too old to accept the pessimism because they had seen strong demand at double these rates in their lives.
"In short, when the 10-year crosses 3 percent and we sell off, you'll want to use that weakness to do some buying," Cramer said.
But President Trump's $100 billion escalation in the tariff debacle with China made Cramer a lot less confident about the stock market.
"While we still don't know which products those tariffs will hit, I don't see a way for Trump to impose them without causing some real pain," Cramer said.
In every potential tariff group Cramer examined from furniture to footwear, the U.S. consumer would get hurt as a result of trade restrictions, the "Mad Money" host told homegamers.
Cramer argued that unraveling the United States' free trade position would create short-term headwinds for the economy and the stock market by eroding disposable income and causing inflation.
"Let's compare these issues side by side: it's entirely possible that this economy is so strong, it can keep chugging along when the yield on the 10-year goes north of 3 [percent]," Cramer said. "But we know economic activity will slow down if the trade war keeps escalating, as that'll leave the American consumer with less disposable income they can spend."
Still, the "Mad Money" host commended the president's dexterity and said investors should not sell ahead of the May 1 tariff deadline as the mercurial leader could still change his mind.
"The best thing you can do? Raise some cash into the modicum of strength that we're going to get periodically," Cramer said. "But then leave something on the table so you're ready when the market comes to its senses about the 10-year. And, of course, you need to stay the course just in case we get a truce in the trade war with China."
"I think it's worth taking some pain here for the chance to participate in that rally," the "Mad Money" host continued. "Here's the bottom line: I don't want you fretting every single second about interest rates, as I hear all day and read constantly. The real worry here? Don't confuse things. It's the global trade war, because that will absolutely hurt your portfolio. As a citizen, I think it's good policy, but as your investing coach, it's of paramount concern."
Disclosure: Cramer's charitable trust owns shares of Goldman Sachs.