As the U.S. and China barrel head-long into Wednesday’s tariff deadline set by President Donald Trump, Amazon might just be a secret weapon for America. “China, that’s who an Amazon, a Walmart are fighting,” Jim Cramer said during Tuesday’s Morning Meeting. “So if you are Amazon, you step back and say, ‘Listen, we’re going to let your stuff stay at the dock. We’d rather be out of stock.’ Then it’s a game of chicken.” Such a move, even on a segment of lower margin goods, won’t be without pain for Club name Amazon but would send a signal to China. JPMorgan recently estimated that between 30% to 40% of the products sold on Amazon could come from China. The company’s exact tariff exposure varies depending on whether the item is sold through Amazon’s first-party business or a third-party seller operating on the marketplace, according to Wells Fargo. “The Chinese factories are very under-capitalized. That’s because they don’t have a consumption model in their own country. So, they’ll have to be selling those goods somewhere else,” Jim said. Consumption represented nearly 56% of China’s gross domestic product in 2023, according to World Bank data, versus around 81% for the U.S. Selling those goods elsewhere would be no small feat. It’s why Jim thinks there may be some wiggle room in the escalating tariff rhetoric between Washington and Beijing. Treasury Secretary Scott Bessent echoed that sentiment in a Wednesday morning interview on CNBC’s “Squawk Box.” He said, “What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them.” The threat of a global trade war started in earnest last week when Trump announced a two-step approach to tariffs: 10% on nearly all imports into the U.S., and even higher country-specific ones, such as a 34% levy against China. The first went into effect Saturday. The second is set to go into effect Wednesday. Not surprisingly, China threatened its own 34% tariffs on imports from the U.S. — to which Trump threatened 50% levies against China for saying it would retaliate. China has vowed to “fight to the end” on trade. The stock market plunged on Thursday and Friday and whipsawed Monday because of all the uncertainty created by the tariffs, which the president unveiled last Wednesday after the closing bell on Wall Street. The market bounced Tuesday on hopes for tariff deals. While China might be tough, other countries appear willing to talk. Bessent said, “If they come to the table with solid proposals, I think we can end up with some good deals.” Amazon did not immediately respond to CNBC’s request for comment on Jim’s remarks. (Jim Cramer’s Charitable Trust is long AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio….
Read More: How Amazon could help Trump in his tariff ‘game of chicken’ with China
