Jim Cramer explains how Trump is trying to control Big Tech

CNBC’s Jim Cramer on Friday detailed how President Donald Trump’s global trade decisions seriously inhibit two of the U.S.’s biggest tech titans, Nvidia and Apple. Investors need to accept that Trump will continue to impact much of the market, he said.

“We have to make our peace with it and, yes, add it to the risk factors of owning stocks here. It puts a premium on companies that Trump and his people play no role in,” he said. “Unfortunately, the list of companies that are exempt from presidential meddling grows shorter by the day.”

The Trump administration put restrictions on exports of artificial intelligence chips, specifically targeting China, in an effort to protect national security and limit the country’s access to the advanced technology. These regulations hit Nvidia hard, and CEO Jensen Huang warned they are a “failure” and are doing more harm to the U.S. than the China. Huang said the restrictions have cut Nvidia’s market share in China from 95% to 50% and motivated the country to make its own chips faster. According to Cramer, it is safer for China to rely on Nvidia for its most advanced chips than develop its own.

Trump is also targeting Apple with punitive tariffs, even after the iPhone maker tried to move manufacturing out of China and into India. But the president announced on Friday that the company will have to pay 25% tariffs on phones made outside the U.S. Cramer disagreed with the government’s action, suggesting American-made iPhones will be too expensive for consumers, and noting that the company has already created many jobs in the U.S.

Cramer said there is some precedent for heavy government interference in big business. For example, he said, former President Harry Truman took control of the railroads in 1964 when a nationwide strike threatened to disrupt the economy. In 1962, former President John F. Kennedy chided steel companies for raising prices during an economically fragile time and pressured them to reverse the measures. But in these instances, the presidents were dealing with important national issues, Cramer said. The current conflicts are because the president is simply “telling companies what to do and where to go, and going after them hard if they don’t,” he continued.

“No matter what, the president’s functioning as the chairman of the board, overruling company execs about business decisions. He’s not accepting their rationales,” he said. “He wants it his way. In that sense, he’s inching step by step toward running what I call a command economy.”

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.