Cramer To Trump: Listen To Home Depot CFO's Comments On Trade

Home improvement retailer Home Depot Inc HD could be seen as the "perfect microcosm for the U.S. economy," and the Trump administration should be paying close attention to what its executives have said, CNBC's Jim Cramer said during Tuesday's "Mad Money."

What Happened

Home Depot CFO Carol Tomé said during the company's second-quarter earnings conference call Tuesday that consumer confidence is "near record high levels." Yet if the Sino-American trade war continues, it could impact consumer demand for Home Depot's products, the CFO said — and accordingly, the company felt it prudent to lower its full-year sales growth outlook from 3.3% to 2.3%.

Tomé's comments make it clear the U.S. is winning the trade war and Home Depot is actively lowering its exposure to Chinese-made goods, Cramer said. But the time to close a trade deal with China is now, or Tomé's warnings could become a reality, he said. 

"I hope the president takes this opportunity to make a deal while the Chinese are feeling the pain from our tariffs, but before we're getting the full impact on our side of the aisle." 

Why It's Important

Cramer said he fully supports Trump's stance against China, "but the last thing any president wants is a trade war-related recession as we head into an election year."

The administration needs to act swiftly and take advantage of the fact that China needs a trade deal right now "more than we do," the CNBC host said. 

What's Next

Home Depot CEO Craig Menear quantified the financial impact of tariffs on Chinese goods at around 2% of U.S. sales, or $2 billion, according to CNBC.

The stock was trading higher by 0.78% at $218.83 at the time of publication Wednesday. 

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Photo by John Phelan via Wikimedia.