Cramer Remix: Tariffs could hurt earnings. It's worth it for some CEOs

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Thank you so much!The CEOs of companies with outsized exposure to China are anticipating that the United States will escalate trade tensions even further by extending tariffs to more Chinese products, CNBC's Jim Cramer said Tuesday.Though President Donald Trump's trade strategy is "flawed," a 25% tariff on all Chinese imports could force the country to change its practices, he said. "Even CEOs who would never vote for Trump are willing to see their own earnings cut if it means they can get a more level playing field down the line," the "Mad Money" host said. "Yeah, their trade practices are really that bad and only the 'punditocracy' refuses to admit it, either because they've bought into the myth of China's invincibility or they believe in free trade at any cost to our working people."Chinese companies have long been accused of stealing intellectual property from the U.S., and Trump placed particular focus on what he saw as a trade deficit between the countries. After hiking tariffs on $200 billion worth of Chinese goods from 10% to 25% last Friday, Trump is threatening to add a 25% duty on another group of merchandises worth about $300 billion.Cramer said the tariffs have the potential to add another $100 billion a year to the U.S. government's purse, which could be leveraged to pay down the budget deficit. Though American consumers will ultimately pay the price for those high duties, Trump will frame it as a tax on the Chinese, the host said. "So even though the trade war means that earnings per share might go lower short-term for a handful of obvious companies — or more if the tariffs trigger a global slowdown — our CEOs seem to be willing to take the pain because they've had it up to here with the People's Republic," Cramer said. "I've talked to these execs for a long time and I keep coming back with one vital conclusion: China has overplayed its hand."The U.S. will find it difficult to collaborate with other trade partners, such as Europe, to cordon off China and push them to change, Cramer said. Europeans, he said, would be more willing to come to terms with the Chinese — if it means that BMW and Mercedes Benz in Germany can take market share from Ford and General Motors. "There's no way to form a united front against China on trade because they can play us off against each other," Cramer said.Get more of Cramer's insight here