The U.S.-China trade war is top of mind for investors, and after interviewing U.S. National Economic Council chief Larry Kudlow, CNBC's Jim Cramer is worried it could get worse.

"Anyone who watched my old pal Larry go off on China knows that if you own shares in the companies that are thought to be dependent on China — and I'm talking about a Boeing, a Caterpillar, United Technologies, Emerson [or] so many others — you've got to be quaking in your wingtips," the "Mad Money" host said.

U.S.-based industrials like these rely on China for business. The Chinese market accounts for roughly 12 percent of Boeing's revenue, 10 percent of Emerson's, 5 percent of Caterpillar's, and 3 percent of United Technologies', according to FactSet.

"China’s not ready to capitulate, and this trade war could get worse before it gets better," Cramer, who spoke with Kudlow at CNBC's Delivering Alpha conference, said on Wednesday.

Kudlow, President Donald Trump's top economic advisor, told Cramer in the interview that the president is "so dissatisfied with China on these so-called talks that he is keeping the pressure on."

On July 10, the Trump administration proposed a new wave of tariffs on $200 billion worth of Chinese goods. The list will undergo a two-month review, culminating in hearings on Aug. 20 through 23.

"If you listened to Larry, you wouldn’t want to own a single share of any company that does a ton of business in China because China hasn’t given an inch on trade," Cramer said.

Kudlow added that while officials in the Chinese government seem to want a deal, Chinese President Xi Jinping himself is "holding the game up."

China’s foreign ministry spokesperson Hua Chunying responded to Kudlow's comments on Thursday in a regularly scheduled briefing in Beijing.

“That the relevant United States official unexpectedly distorted the facts and made bogus accusations is shocking and beyond imagination," she said. “The United States' flip-flopping and promise-breaking is recognized globally."

Watch CNBC's live stream of Cramer's interview with Kudlow here.

"As far as we know, President Xi, at the moment, does not wish to make a deal," Kudlow told Cramer. "I’d love to be wrong on that. We are waiting for him. The ball is in his court. And the tit-for-tat business, which is nobody’s favorite path, but nonetheless — they can end that this afternoon ... by providing a more satisfactory approach."

On July 6, U.S. authorities placed $34 billion worth of tariffs on Chinese products after trade talks between the two nations reportedly ended without a settlement. China quickly retaliated with comparable tariffs of its own, accusing the United States of starting the "largest trade war in economic history."