Jim Cramer talks the White House's new China EV tariffs

My mission is simple. To make you money. I'm here to level the playing field for all investors. There's always a home working somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome, Mad Money. Welcome. I'll be able to make friends Just trying to make a little money over here. My job. Not just entertain, but to educate. To teach. You call me one, 807, four, three. CNBC Tweet me at Jim Cramer If the federal government is giving money away, I think you should take it. Today Uncle Sam decided to give a lot of money away, yet very few people took advantage of the opportunity. Well, you couldn't tell from the averages. Dow gaining 127 points that's be advancing .48%, NASA clubbing .75% to a new all time record. But today, the market was consumed by smaller investors buying shares and lousy meme stocks like GameStop and AMC. They're betting that, like in January 2021, the short sellers won't be able to take the pain. And when that happens, the shorts need to go buy in stock. Buy, buy, buy, buy, buy, creating what's known as a short squeeze to propel stocks to ever dizzying heights even much higher than we saw today. Now we don't know when that ends, but it does end eventually, and it doesn't end well. Sure hit the last time we did this in 2021, being many people holding a deflated bag, and more on that later. For now though, I want to talk about the big opportunity nobody seemed to care about Washington's given money. Way where in a fact sheet they hit my desk from the White House titled, quote, President Biden takes action to protect American workers and businesses from China's Unfair trading practices. Wow, here it comes the gist. The president believes that the Chinese are, I'm going to quote, again flooding global markets with artificially low priced exports. End Quote. So Biden's using his power to slap tariffs on an $18 billion in exports from China. That's painful. Normally once that kind of news gets published, any stock that could conceively benefit would soar. But you see today's in bed today. Investors were so drawn to illusory short busting opportunities that they overlook these very real tariff opportunities. There are now a host of industries that are about to be protected by bigger tariffs from Chinese exports and it will help their sales and earnings for years. Now some of them, like steel, don't really matter because our governor's already done a real good job shutting down the Chinese steel. But there are others where these tariffs boosts are a very big deal. Let's start with the biggest single winner that nobody cared about, Owens and Minor. Now the government's slapping 25% tariffs on Chinese face masters surgical gloves. Previously the tariff was 0 to 7.5%. For this PPE, I went to minors, the dominant American player in the space, so it can probably take some chair here now the stock is wall of its eyes after poorly received quarter and it seems very viable and no one cared. Next beneficiary makers of syringes and needles. China's being hit with a 50% tariff on these medical supplies up from zero like masks and gloves. Chinese producers have really come after these components. Who wins from this? I happen to like Becton. Dickinson, a terrific medical device company that we spent some time with when we were out at JP Morgan Healthcare Conference in San Francisco this year. Back in Dickinson's got a significant organic growth, superior operating cash flow recently raised guidance. The stock was actually down a couple of bucks today. Sure, you could say needles aren't a big business for them, that they makes much more highly valued devices, that's true. But more customers will be driven to the company and I think they'll see less Chinese syringe competition, especially when it comes to any new injectables like the GOP-1 weight loss drugs. Either way, it is a win for a very undervalued stock. How about solar cells? The government raised tariffs from Chinese solar cells from 25 to 50% and the market reacted totally wrong. That's right, the worst solar stocks, the money losing home solar plays that depend on those cheap Chinese panels all rally because they also have a huge short position. The meme just bought anything with an outsized large short position. The mischief making memesters. They strike again. But there's a real solar company A made in the USA solar company First Solar. That's the clear winner in this crazy market. The stock actually fell to and half bucks at these levels. First solar cells were about 9 times next year's earnings estimates with tremendous growth rate. And this is before we factor in the impact of the tariffs on some of their major competitors. Now I think it's an out and out winner part part of the world where solar might be the dominant power solution by 20-30. Stay with us a year from next tracker where I get that number. Now, while this next one's more diffuse. Our government's doubling the tariff on legacy semiconductors from 25% to 50% legacy can be a slippery term. When COVID rage, we knew that our country couldn't produce enough of the older larger form factor chips. Not the state-of-the-art NVIDIA kind of chips, making us hostage to foreign suppliers. And then those supply chains got busted. So this is part of a larger strategy, Bring semiconductor manufacturing back home. Now here's one where the market actually got it right. As Texas Instruments, the biggest legacy chip maker, saw its stock jumped 3 bucks to a new 52 week high today. Too late to buy I think so. Same with Microchip technology, another legacy chip market and Analog Devices, when I really like to hit a 52 week high because legacy is a slippery term. There's some edge cases though I, you know might be on semi and that's a potential winner. They made it hard to get auto chips during the pandemic. Might be worth betting on now the stocks gotten so low. The biggest winners, though, will be the American automakers. There's a watchful belief that our car companies are going to be roadkill once China's auto industry gets here. We got that from who? None of the automakers themselves, especially Ford's executive chairman, Bill Ford. He's been the most adamant about the existential threat of government subsidized competition with the PRC. On CNN, Bill Bill Ford said about 11 months ago. The Chinese and I, quote, developed very quickly and they developed them in large scale and now they're exporting them, End Quote, he went on to say. Quote, they're not here, but they'll come here. We think at some point we need to be ready and we are getting ready. End Quote, hey, with 100% tariff from Chinese Otis, Ford doesn't need to be all that ready. It can focus on other things that actually make money. Now Biden didn't outright ban Chinese vehicles, but he basically doubled their price. And if Ford can't be that well, they might just well throw in the towel. If we get a pro commitment from the government and we'll it'll stop the import of any Chinese car made in Mexico or at least slap the same 100% tariff on that. Well, that would be a go A1 way to closing the back door from China to here. Not only does this tariff protected American car companies from cheap Chinese electric vehicles, it also means that the regular vehicles, their regular cars and trucks and hybrids will benefit too. I like this policy, but even if you hate it, it's a clear giveaway to Ford and GM and you kind of cash it on a giveaway when you get it. The cheap reason GM and Ford stock sell at the bottom of the SP500 barrel is because of this existential Chinese threat. Whenever China's been able to allow the dump merchandise, they've destroyed pricing and destroyed companies. That won't happen here now, not with these tariffs. I've been a broken record on Ford. I'm particularly aware of that and we own it for the Chapel Trust, it's got a 4.83% yield preference sake. If Ford can just curtail the immense losses in electric vehicles. I mean some people think of like 150,000 per GAR, well then it's much easier with the new tariffs and the stock can and will go higher. Even though it seems to be as I told my partner David Faber Epoxy 12 and I can't help that Home Depot not that great 1/4. Why do I believe these ideas can work? Because this market cannot walk and chew gum at the same time. Today that's short busting. When it's mine, it can't handle another thought like the winners from the new tariff schedule just gave you. Hey, maybe by tomorrow people realize the First Solar is the winner and the Little Solar is the losers. Maybe they'll realize that Owens and Minor makes personal protective equipment Rebecca and tickets and will boost its margins and syringes immediately. Bottom line, that's how I like to pick stocks, but you can just decide that if it doesn't have a big short position, it's not worth your time. If that's the case, though, you know what? You'd be better. You'd better hope that Hello Kitty comes. We're back with a litter box with some fresh step dumped in it that works. Donna in New Jersey. Donna, Hello, Jim, it's Donna from New Jersey. I thought so. What's up? Hey, Jim. Adobe dropped in February and it hasn't been over 520 since March, although targets are over 600. Adobe looks dead in the water now. Earnings are due June 13. Jim, what do I do, Sell now or hold? No, no, no. It's really the cheapest I've seen and a lot of this has been down 20% of the year. A lot of this is because of belief that they weren't able to buy this convert and that they have a too expensive off sweet offering and they have to cut the price of the sweet offering. You know, Shantanu Ryan is going to figure this one out. Now I don't know how he's going to figure it out. I don't have an answer for him, but I'm betting I'm not running Adobe and I know that he's a smart person and therefore I'm banking with him at the level of 475, give or take, like 10 or 15 points. So there I go. Yeah, I'm saying that to Donna from New Jersey. Now let's go to Errol in Indiana. Errol, hey, Jim, why has the profit to earnings remained so flat compared to other stocks when the stock market has been doing so well? Well of which stock? LNG. Oh, you know, I think LNG look OK. So this is a very complicated business right now. LNG is we're trying to figure out whether they'll be able to build more more plants. We do know that the the president said you know we're going to put a pause to 2028. It's wrecked the whole industry. It's as if people the president somehow felt that it wouldn't matter and the president was just dead wrong. Now I look hey there like natural gas, it doesn't matter. He destroyed the growth industry and I think it was short sighted because why? Because I like the fact that our allies were depending on our natural gas. We should have helped them instead of doing something that I think is going to ultimately help the Russians. All right? This market cannot walk and chew gum at the same time. They had short busting on its mind, not making money. They will get back to real business tomorrow. Oh man, money tonight. Stanley, Buck and Decker got hit after earnings and with the stock returning to pre report levels, I said that was CEO pressure off the company ringing the opening bell. Then Next Track reported earnings after the bell and I'm running through the numbers with the CEO and CBC is out with their disruptor 50 list today highlighting some of the what's that probably some of the innovative private companies that are changing the world. So I'm talking with #22 chime to see how the digital only financial provider is shaking up the space. I suggest you stay with Kramer. Don't miss a second of Mad Money. Follow at Jim Cramer on X. Have a question? Tweet Kramer hashtag Mad Mentions Send Jim an e-mail to [email protected] or give us a call at one 807 Four Three. CNBC. Miss something? Head to madmoney.cnbc.com.