Jim Cramer says Nvidia chips could give U.S. leverage in China trade war

CNBC’s Jim Cramer on Wednesday said graphics chips from artificial intelligence powerhouse Nvidia could give the U.S. leverage in the ongoing trade war with China.

“If Trump’s wants to win this game, he may have to show his trump card, Nvidia. As I see it, the others just don’t make for a good hand,” he said. “You have to play with the cards you’ve been dealt, and for decades, our government did everything it could to encourage outsourcing to China. They left us with a pretty lousy darn hand, both Republicans and Democrats.”

Trade tensions between the U.S. and China have been high since President Donald Trump threatened to hit Chinese imports with sky-high tariffs. While the U.S. has agreed to a 90-day pause on the new duties, relations remain tenuous. Trump wrote in a Wednesday social media post that it is “extremely hard” to make a deal with Chinese President Xi Jinping, days after the White House indicated the two may speak this week.

Cramer pointed to a few U.S. exports he thinks China wants — natural gas, Boeing planes, turbines for power plants and Nvidia products. He dubbed Nvidia the “one ace in our hand,” but said the Trump administration doesn’t want to play it. The White House announced strict regulations on Nvidia’s exports to China — which CEO Jensen Huang said will cause his company to lose billions and hinder the U.S. from being a global leader in AI.

Big business across the U.S. relies heavily on Chinese manufacturers, despite efforts to diversify their supply chains, Cramer lamented. He named Apple, Target, Stanley Black & Decker, Best Buy and Walmart as some prominent names scrambling to adjust to the new trade landscape.

“President Trump better be a much tougher negotiator than President Xi, because right now we’re so hooked on China it’s almost hard to believe,” Cramer said.

The White House did not immediately respond to request for comment.

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Disclaimer The CNBC Investing Club Charitable Trust owns shares of Nvidia and Apple.