White House economic adviser Larry Kudlow once again rejected the notion that the world is in a trade war, but he pointed at China as the reason for escalating tensions.
“China is the problem. President Trump is the solution,” Kudlow told Bloomberg TV.
“This is the first president in 20 years to have the backbone to go in and challenge China on the kind of unfair and illegal trading practices that they have adopted for the past several decades,” Kudlow said.
China warned on Friday it was fully prepared to respond with a “fierce counter strike” of fresh trade measures if the United States follows through on President Donald Trump’s threat to slap tariffs on an additional $100 billion in Chinese goods, Reuters explained.
In light of what he called China’s “unfair retaliation” against earlier U.S. trade actions, Trump upped the ante on Thursday by ordering U.S. officials to identify extra tariffs, escalating a tit-for-tat confrontation with potentially damaging consequences for the world’s two biggest economies.
China’s Commerce Ministry spokesman, Gao Feng, called the U.S. action “extremely mistaken” and unjustified, adding that the spat was a struggle between unilateralism and multilateralism. He also said no negotiations were likely in the current circumstances.
“The result of this behavior is to smash your own foot with a stone,” Gao told a news briefing in Beijing. “If the United States announces an additional $100 billion list of tariffs, China has already fully prepared, and will not hesitate to immediately make, a fierce counter strike.”
He was speaking shortly after Trump defended his proposed tariffs on U.S. radio, saying the move might cause “a little pain” but the United States will be better off in the long run.
Asked in an interview with New York station WABC about the effect on U.S. stock markets, Trump said the market has gone up (since he took office) “so we might lose a little bit of it.”
For his part, Kudlow said there may be more serious negotiations between the two superpowers in the “coming months,” and that the U.S. wants China to stop violating U.S. intellectual property and open the Asian nation’s markets.
“Blame China for not playing ball, don’t blame the president. He’s standing up for American companies and business,” he said.
"This is a moderate, tempered approach that we are taking," he said. "This is not a trade war," Kudlow said.
"There's no secret here. They've got enormous trade and tariff barriers," he said. "They've got to stop their stealing of the intellectual property that we try to use in any company around the world. Those are good places to start."
Meanwhile, Kudlow said there are ongoing informal talks on trade between the United States and China, Kudlow said on Friday but he did not specify at what level the negotiations were occurring.
“There are ongoing talks. I don’t want to name names, I don’t want to put anyone on the spot, there are ongoing talks. They’ll be back and forth, U.S. and Beijing, and so forth,” Kudlow told Fox Business Network.
However, in an earlier interview Bloomberg TV, Kudlow said official discussions had not begun.
Kudlow told Bloomberg Television’s Jonathan Ferro, referring to talks with China on tit-for-tat tariffs announced in recent weeks. “The president speaks to President Xi, the second and third levels to each other. Perhaps there will be some fruitful negotiations, but I would say they have been unsatisfactory, so we will see.”
Trump on Thursday instructed the U.S. Trade Representative’s Office to consider tariffs on an additional $100 billion in Chinese imports, bringing to $150 billion the range of Chinese goods under consideration. China has said it will respond proportionately, and has so far proposed duties on $50 billion in U.S. goods., including aircraft and soybeans.
Before Thursday’s announcement by the president, Kudlow had been working to tamp down worries of a full-out trade war between the world’s two biggest economies.
Kudlow, a fomer CNBC special contributor, succeeded Gary Cohn as Trump's top economic adviser. Cohn, who opposed imposition of tariffs, resigned in March.
(Newsmax wire services Reuters and Bloomberg contributed to this report).
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