Mad Money

The odds that the US and China don't reach a trade deal just got higher: Cramer

Key Points
  • The Trump administration's mixed messaging on trade with China could result in increased tensions between the United States and the People's Republic, CNBC's Jim Cramer warns.
  • U.S. officials have placed 10 percent tariffs on $200 billion in Chinese goods. Those tariffs are set to rise to 25 percent at year-end.
Odds the US and China don't reach trade deal higher: Cramer
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Odds the US and China don't reach trade deal higher: Cramer

The Trump administration's mixed messaging on trade with China could result in increased tensions between the United States and the People's Republic, CNBC's Jim Cramer said Monday as the major averages endured a technology-led sell-off.

After hearing the hard-line stance embraced by Vice President Mike Pence in his Oct. 4 speech at Washington's Hudson Institute, Cramer worried that what seems like dealmaking could actually be a long-winded strategy to destabilize China's socioeconomic position.

"It's hard not to get the impression that this administration cares more about trying to destabilize or even topple the Chinese Communist regime than it does about negotiating a fairer trade deal," Cramer said on "Mad Money."

In the October speech, Trump's second-in-command stopped short of declaring what Cramer called "economic war" on China. Pence furthered that stance at his speech at the Asia-Pacific Economic Cooperation summit on Saturday by calling on nations to reconsider backing China's massive Belt and Road infrastructure initiative.

Those arguments could stymie any progress at the upcoming G-20 summit, at which President Trump will meet with Chinese President Xi Jinping to discuss U.S.-China trade and the potential for a renewed trade deal, Cramer said.

"You can hope that the G-20 yields results, but I would say that Pence's reiteration of the hard-line containment policy makes that event much more binary," Cramer warned. "The odds increased dramatically this weekend that there's no deal to be had."

And while investors "could easily make the case that it's all rhetoric" focused on getting better deal terms, the "Mad Money" host was prepared for the worst.

"All of this talk of containment sure sounds sincere to me," he warned, saying that Pence's hawkish take this weekend was "just a further extension of the cold war that began Oct. 4 and seems to get hotter every single day."

The G-20 meeting of the world's developed economies will take place from Nov. 30 to Dec. 1 in Buenos Aires, Argentina. In September, President Donald Trump announced that he would place duties of 10 percent on $200 billion worth of Chinese imports. They are set to rise to 25 percent at the end of 2018.

WATCH: Cramer's growing worries on US-China trade

The odds that the US and China don't reach a trade deal just got higher: Cramer
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The odds that the US and China don't reach a trade deal just got higher: Cramer

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