Cramer on Trump's Canada jab: This is no longer the art of the deal, but 'the art of destruction'
- CNBC's Jim Cramer voices concern about the trade tensions between the U.S. and Canada after the president said he rejected a meeting with Canadian authorities.
- The "Mad Money" host says the market's response "calls into question" the narrative that has driven stocks lately.
President Donald Trump's claim that he rejected a meeting on trade with Canada struck CNBC's as surprising given the country's history of allyship with the U.S.
"I'm kind of stunned that President Trump could take on Canada, going totally ad hominem and totally hostile to our nation's largest trading partner," the "Mad Money" host said on Thursday. "I found myself thinking, 'This is no longer the art of the deal; it's the art of destruction.'"
Trump made his remarks at a Wednesday press conference during the week of the United Nations General Assembly, a week centered around international relations and policymaking.
A spokeswoman for Canadian Prime Minister Justin Trudeau later said that "no meeting was requested" by the United States.
To Cramer's surprise, however, the stock market — which in recent weeks has buckled on any news of escalating trade disputes — seemed to brush off the barbs.
"It didn't even register. Today's positive stock action calls into question the whole narrative that these trade disputes are going to derail the entire economy," the "Mad Money" host said, doubling down on earlier comments.
Cramer's chief concern was how critical Canada has been to the U.S. economy. Having withstood two world wars and a series of conflicts by the United States' side, Canada is a key trading partner to 36 states — not to mention its participation in the North American Free Trade Agreement, a trilateral pact now being renegotiated by the Trump administration.
"I'm not saying that we can't live without Canada," the "Mad Money" host said. "I am saying that trying to unravel and unwind our economy from trade with Canada would be like a logistical nightmare."
Given the almost nonexistent trade barriers between the two countries, industries that rely on Canada as an "extension" of the U.S. economy could therefore get hurt if trade with our northern neighbor breaks down, Cramer explained.
"Our auto industry is the prime pain point in the system. American automakers have always operated as though Canada and the United States are interchangeable," he said. "No wonder the stocks of Ford and GM hit 52-week lows today."
But stocks rose Wednesday despite the tensions, suggesting to Cramer that what plagued the market for much of 2018 — namely tariffs and rate hikes — was being set aside in favor of positive drivers like strong employment and earnings growth.
"I'm frantically trying to figure out what it all means," the "Mad Money" host said. "Maybe not enough investors took the president's press conference seriously. On the other hand, maybe the economy's just so darn strong that even a Canadian trade meltdown isn't enough to phase [us]. It's an open question, but today's action suggests that we actually might end up liking the answer."
Stocks rose in Thursday's trading session, with the major averages all finishing the day higher. On Wednesday, sources told CNBC that U.S. Trade Representative Robert Lighthizer plans to issue the text of a trade deal with just the U.S. and Mexico on Friday that includes the option of allowing Canada to join at a later date.
—With reporting from CNBC's Ylan Mui and Tucker Higgins.
WATCH: Cramer on Trump's Canada remarks
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