CNBC’s Jim Cramer said Wednesday that “tariffs worked” as a means to prod China to agree to a “phase one” trade deal with the United States.
“I keep wondering when people are going to recognize that it is historic that tariffs did succeed,” Cramer said on “Squawk on the Street,” shortly before U.S. and Chinese officials were set to sign the initial trade agreement at the White House later in the morning.
“Tariffs were not supposed to work,” said Cramer, who has all along been a supporter of President Donald Trump’s hard-line approach toward China.
“The Chinese were supposed to be able to get around them. It didn’t happen,” the “Mad Money” host added. “The Chinese were kind of accepting that they had to get something in order to keep the American market.”
The centerpiece of the initial trade deal is a pledge by China to purchase an additional $200 billion worth of U.S. goods.
The phase one agreement, reached in December, canceled planned U.S. tariffs on Chinese-made smartphones, toys and laptop computers. It also cut in half to 7.5% the rate levied on about $120 billion worth of other China imports.
However, the U.S. is leaving in place 25% tariffs on a vast, $250 billion array of Chinese industrial goods and components used by U.S. manufacturers.
Earlier Wednesday, Treasury Secretary Steven Mnuchin told CNBC that he expects that more U.S. tariffs would be rolled back if a phase two trade deal with China is reached.
Cramer said China has “gone back on so many things after they pledged [then] that you have to keep the tariffs in place just to be able to see … if they’re really going to change their ways.”
— Reuters contributed to this report.