CNBC's Jim Cramer said Tuesday that the Trump administration's move to blacklist some Chinese tech companies will hinder its chances in negotiating a trade deal later this week.

The U.S. announced Monday that it's placing some Chinese tech companies — which it believes use equipment to repress China's Muslim minority group — on the so-called Entity List. The move comes just before Chinese trade officials are expected in Washington on Thursday to resume high-level trade negotiations.

"They're torpedoing the talks," Cramer said on "Squawk Box." "Anybody that is hopeful, their hopes are dashed."

The U.S. and China have been entangled in an escalating trade fight for the past 15 months, with the world's two largest economies upping retaliatory measures on one another.

Additional tension has been placed on the talks this week, as Chinese officials are reportedly growing hesitant to pursue a broad trade deal that would include key commitments to the U.S.

A spokesman for China's Foreign Ministry said Tuesday to "stay tuned," when asked if China would retaliate over the blacklisting. Chinese officials are also planning to cut their stay short and have toned down their expectations, according to the South China Morning Post, which is owned by Alibaba.

The hesitancy and blacklisting comes days after top White House economic advisor Larry Kudlow said that "positive surprises" could emerge from the trade talks.

"I'm not predicting," Kudlow told Bloomberg on Friday. "I'm just saying don't rule that out."

However, Cramer said that optimism from Trump administration officials is "completely antithetical [to] what they're doing."

"You couldn't have a worse way to start these talks," the "Mad Money" host later said.

The Trump administration is reportedly moving ahead with discussions about blocking U.S. government pension funds from investing in Chinese stocks, Bloomberg said Tuesday. Last week, White House trade advisor Peter Navarro denied such reports that first surfaced in late September. The White House is also said to be discussing how to limit stock index providers from including Chinese stocks. Alibaba and JD.com, U.S.-listed Chinese shares, fell on the news.

"Our government is not keen on any more IPOs from China," Cramer said.



In response to a request for comment, the Commerce Department pointed CNBC to a press release announcing the addition of the Chinese companies to the Entity List.

U.S. stocks plunged Tuesday as optimism for a U.S.-China trade deal dimmed. The Dow Jones Industrial Average was down about 1%.

— CNBC's Kevin Stankiewicz contributed to this article.