• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Jim Cramer

Jim Cramer: It's Time for China and the Job Exporters to Pay

The cost will ultimately be small for us and big for them -- and now is the time to do it.
By JIM CRAMER Dec 12, 2019 | 07:17 AM EST
Stocks quotes in this article: AAPL

When my father used to sell U.S. made gift wrap, which was the best in the world, this was the season when he really killed it. He had all of these beautiful rolls of American made paper in his workshop, which he called "the place," and gorgeous loose-leaf books of fantastic styles for the holidays, from kitsch and throwback to commercial and colorful. He repped so many mills that it was hard to find a paper he didn't have.

Then the Chinese decided to target the industry. They made paper so much more cheaply than the United States that, frankly, it didn't matter if it were of inferior quality. Who cared? It got ripped up anyway.

You couldn't see it coming, really. The Chinese started by taking over what pop called the "stretch band" industry, those golden giant rubber bands that replaced the beautiful Sasheen ribbons that 3M made that my father sold to so many small merchants along with the gift wrap rolls that they needed for the holidays. Sasheen was one of my dad's best sellers. I was so proud of it that I learned to make bows of it and demonstrated it in Mrs. Mixer's 5th grade class at Penn Manor.

Now if you google Sasheen it's a popular girl's name. You can't even find the real goods.

Once they got their foothold into the packaging, they went all in gift wrap. We welcomed it. But you know what we forgot -- meaning we, the government? That people in small towns manufactured the stuff and manufactured it better than anyone. It just cost too much versus what the Chinese government could make it for.

Now, this weekend, we are at last getting our revenge, we the people whose parents lost their jobs to the Chinese for so many goods that we used to make so well, from pajamas to footwear to tablewear to bathrobes.

Sure there's a lot of electronics: screens, laptops, phones, microwaves, clocks -- did you know companies still made clocks even as they are suboptimal versus cellphones? Toys, high chairs, ceiling fans, it goes on and on. With each of these I see a group of towns decimated like the towns that made gift wrap for my dad's jobbing business.

The economists are all decrying how much it's going to lower the standard of living for the working person in this country. I constantly hear numbers bandied about -- $1,000 per household is the one that seems to have the most cogency.

Anyone who studies retail as I do, knows what a crock that is.

More important, would we save the $1000 -- even if it were that number -- versus the layoffs and the loss of dignity from the job eliminations? Do we want to put a double price on it, the scourge of opioid use and killer Fentanyl that the Chinese send our way?

It seemed like a terrific trade off when it first happened. Now it seems pretty darned hollow.

Of course it doesn't have to be that way.

First, companies can always re-shore these businesses. If the labor costs are too high in the U.S. at least re-shore to Mexico, as Martin Franklin did so well when he ran Jarden, which made a lot of these electronics and switched factories from China to Mexico.

Second, U.S. manufacturers can chose to push at the Chinese, saying that they will move factories quickly to other countries as ports and infrastructures are built out. Why not? Most of the jobs are make-work anyway, just a way to put people to work in China as they take our jobs here. Do you think footwear or games are so precise that they can't be made in Thailand or Taiwan?

Third, the retailers with heft can squeeze middlemen until they move the manufacturing back to the U.S. If the tariffs make the goods more expensive than if they are made here, so be it. That's the damned point.

Finally, just give Apple (AAPL) an exemption for competitive reasons. If Apple doesn't get one, then the Koreans will be the big winners, not the Chinese as that is who Apple really competes with. That one exemption will be worth it as Apple has done so much more than any other company on earth to making things here, including the highest of intellectual property.

Or to put it another way: unlike these rapacious capitalists and their low-skill manufacturing jobs, Apple is a provider and a creator of so much good here, even as it assembles much over there. You exempt it and guess what? The rest won't even matter as all manufacturing can be moved from China just like it was moved from the U.S. With job growth this strong? You won't even notice it.

It's time for China and the job exporters to pay. The cost? Small for us. Big for them. If we want to stay a great power versus the Chinese by starving them of capital to keep their hegemony at bay, now's the time to do it. Things may never be this good again.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long AAPL.

TAGS: Economy | Markets | Politics | Trading | World | Jim Cramer | U.S. Equity | Global Equity |

More from Jim Cramer

Jim Cramer: I'll Put My Money With 'Boring but Lucrative' Any Day

Jim Cramer
Sep 29, 2021 1:28 PM EDT

Let's look at that recent downgrade of 'dull' Morgan Stanley and see why exciting is best left for the stadiums and amusement parks -- and not stocks.

Jim Cramer: America's Toughest Job? Finding Workers

Jim Cramer
Sep 28, 2021 12:17 PM EDT

It's the question of our time: Where are the people willing to take on these better paying gigs? Let's see what's going on and what we need to happen.

Jim Cramer: Here's How Analysts Can Be Off By a Wide Margin

Jim Cramer
Sep 24, 2021 12:02 PM EDT

Let's look at the reactions to Nike, Costco and Salesforce to see what happens when they're viewed from a real world perspective.

Jim Cramer: It's Pure Insanity That We Don't Make Chips Here in the U.S.

Jim Cramer
Sep 23, 2021 11:05 AM EDT

While the big guns meet at the White House about the global chip shortage, the president and these companies are approaching this all wrong.

Jim Cramer: Go Ahead, Have a Cow, but I Say Powell and Xi Are Bulls

Jim Cramer
Sep 22, 2021 3:51 PM EDT

We rallied, because China's President Xi and Fed Chair Powell made decisions that they knew would lead to rallies.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:40 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    To Improve Your Trading and Investing, Spend More ...
  • 08:44 AM EDT PETER TCHIR

    CPI Beats Expectations, But Maybe Not the 'Whisper'?

    Slightly better-than-expected inflation across the...
  • 01:44 PM EDT STEPHEN GUILFOYLE

    This Holding Lights Up With Strong Earnings

    Check out the latest from TheStreet's Stocks Under...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login