Commerce Secretary Lutnick’s optimism on tariffs might be misplaced: No deal is coming – Jim Cramer

According to Howard Lutnick, the commerce secretary, tariffs are meant to threaten other nations in order for them to be fair to the US. However, other nations do not feel threatened; instead, they are ready to fight back. Jim Cramer, commonly known as ‘inverse Jim Cramer—the market prophet’, says there is no deal coming.

If you’ve been involved in trading, whether it’s crypto or stocks, you’ve probably heard of Jim Cramer. The money market commentator nearly never gets things wrong. What is his manner of approach? When he says something, he means the opposite. 

This is what he said,“My takeaway on auto tariff issue-I think that Commerce Secretary Lutnick’s optimism might be misplaced. I do not see a deal on the horizon.” What he means is there has to be a deal.

The markets have been crashing so hard. It sure is hurting Trump, the businessman’s ego. Reports are already out that the markets have erased the bully rally that he caused after his victory. Also, the nations on the receiving end—China, Mexico, and Canada—are ready to fight back. 

Has America escaped the wrath of its tariffs? No. This can only mean one thing: There has to be a middle ground.

The auto tariff issue – who is it affecting?

The president said that auto tariffs would go into effect on April 2. He has been using tariffs as a key tool to reduce America’s trade imbalance, boost domestic manufacturing, and reach other policy goals, such as stopping the flow of drugs and illegal immigrants.

This would mean trouble for Mexico, Canada and Japan.  General Motors made 889,072 light cars in Mexico in 2024, which is 22.3% of the nearly 4 million vehicles made that year. Stellantis had the third most, 419,426, and Ford was right behind it with 386,446. 

Michigan brought in “$46B in goods from Canada and $69B from Mexico” by itself, with most of that coming from the auto business.

About 1 in 4 new cars are assembled in Mexico (14% of cars) or Canada (9% of cars). Steel (54% of the average vehicle’s weight) and aluminum (12%) make up almost all new cars. About 23% of steel and 50% of aluminum are imported; for example, China makes almost 60% of the world’s aluminum. There is no doubt that tariffs will make newly manufactured cars less appealing.

Japan sent 17% of all its goods abroad in 2024, and more than a third of those were cars, mostly to the U.S. This large part of the reason for the high trade gap between Japan and the U.S. could make Trump angry since he wants to use tariffs to reduce the U.S.’s trade deficits and get other countries to build factories in the U.S.

Analysis shows that Japan already makes more cars in the U.S. than it sends abroad. In 2023, Japan made 3.3 million cars in the US, more than twice the 1.5 million cars it sent to the country.

Trump’s friend’s company has not been receiving the tariffs hit so well. In fact, Tesla’s stock price has dropped a lot since the election. It’s down over 20% year-to-date and about 40% since its December high point.

However, analysts are still not sure if the recent drop in sales will be more than a temporary setback. On Monday, Morgan Stanley released a new bullish thesis that suggests shares could eventually reach $800. 

Backed by Jim Cramer’s stance of there being a relief, Tesla could go bull in the coming days. In fact, investors are speaking of a bull rally for Tesla.

Howard Lutnick says Trump might compromise his tariff stance

Lutnick has long believed that because the US was treated horribly by the global trading environment by having tariffs and non-tariff barriers, the US can use tariffs to create reciprocity, fairness, and respect. 

This is to say the Trump administration could remove tariffs as quickly as imposing them if reciprocity and fairness goals were reached. Now, amidst the anxiety caused by tariffs against America’s biggest trade partners, Mexico and Canada, Lutnick is already speaking about compromise.

After Trump stayed true to his pro-tariff stance in his speech to Congress on Tuesday night, Lutnick told reporters that the administration would probably announce a deal to cut the tariffs on Wednesday, which has not happened yet.

BREAKING: Commerce Secretary Lutnick says to expect an announcement this afternoon on Canada and Mexico.

"Trump maybe, maybe will consider giving relief," he says.

— The Kobeissi Letter (@KobeissiLetter) March 5, 2025

He said, “He’s really looking carefully at that trying to figure out if there is a way in there that he can come in the middle, where he can give the Canadians and Mexicans something, but they have to got do more.”

He added, “It’s not gonna be a pause. None of that pause stuff. But I think he’s going to figure out, you do more, and I’ll meet you in the middle someway.” A way to calm the markets? Maybe. This still shows the confidence that the U.S. has that every other nation needs America.

But is that true? Three important trade partners to America are fighting it. Who really has the mic? I think time will tell, and it will not be long.

Has the crypto industry been forgotten? – Howard Lutnick 

The crypto industry was confident that it was among Trump’s most important initiatives. However, that has not been the case. The main thing has been Trump fighting nations with tariffs. These tariffs have even caused backlash to crypto.

Recently, Trump announced the crypto stockpiles, causing a steady bull rally, but the news about tariffs erased all the gains. Lutnick has come up to remind the community that Trump has them in mind. 

He said, “The President definitely thinks that there’s a Bitcoin strategic reserve […]Now, there will be the question of, how do we handle the other cryptocurrencies? And I think the model is going to be announced on Friday when we do that.”

He added, “A Bitcoin strategic reserve is something the President’s interested in. He spoke about it all during the campaign trail […] So Bitcoin is one thing, and then the other currencies, the other crypto tokens, I think, will be treated differently—positively, but differently.”

Is this encouraging, or is the tariff issue getting all the attention? Encouraged by Jim Cramer, netizens say that the crypto market will go bullish soon as well.