CNBC’s Jim Cramer said Thursday the court fight over President Donald Trump‘s tariffs temporarily injects more uncertainty into the stock market — but, he argued, it ultimately could be a gift to investors who worry about the effects of the White House’s trade policy.
“Even if you believe in fair trade, not free trade, as I do, you have to wonder how we’re going to get any meaningful deals now that our trading partners know the courts might invalidate the whole tariff agenda,” Cramer said on “Mad Money.” “In that sense, but only in that sense, maybe the judiciary shooting down the tariffs is the easiest way out of this nightmare.”
Cramer’s comments came after the S&P 500 and Nasdaq Composite both ended Thursday’s session up 0.4%, well off their highs of the session. Early trading action on Thursday morning suggested Wall Street was headed for a strong day, thanks to artificial intelligence bellwether Nvidia’s better-than-expected earnings report the prior evening and a ruling from the U.S. Court of International Trade that struck down most of Trump’s tariffs.
However, the positive sentiment fizzled as the day went on, Cramer contended, because uncertainty over the legal challenges to the tariffs increased. The Trump administration vowed to fight that lower-court ruling, and said it could ask the Supreme Court to pause the decision as soon as Friday. Then, on Thursday afternoon, an appeals court ruled in favor of the White House and temporarily paused the Court of International Trade’s ruling.
“Right now, the administration has to hope that our trading partners believe the Supreme Court will uphold the tariffs, or that another lawsuit against the next iteration of tariffs will somehow fail. Because if the judiciary shoots down the tariffs, Trump has zero cards to negotiate new trade deals,” Cramer said.
The reason why that matters for the stock market is hope that the U.S. would soon strike trade deals with many countries — leading to lower import duties and more clarity for businesses and consumers alike — has helped fuel the S&P 500’s rally in recent weeks. The index is up nearly 19% from its April 8 close, the day before Trump voluntarily paused most of the “reciprocal” tariffs that drove the market into a four-day plunge.
“Then again, if the [Supreme Court justices] do side against the White House, we don’t need to worry about retailers raising prices across the board to pass on the tariff pain,” Cramer said.
When asked to respond to Cramer’s remarks, the White House pointed CNBC to comments made earlier Thursday by press secretary Karoline Leavitt. “The Supreme Court must put an end to this,” Leavitt said at a press briefing. The judges sitting on the U.S. Court of International Trade “are threatening to undermine the credibility of the United States on the world stage,” Leavitt also said.
Disclosure: Jim Cramer’s Charitable Trust, the portfolio used by the CNBC Investing Club, owns a position in Nvidia.
