White House economic adviser Larry Kudlow cast doubt Tuesday that President Trump will agree to a cease-fire in the U.S.-China trade war when he meets Chinese President Xi Jinping later this week, calling Beijing’s response to Trump’s demands “disappointing” and “unsatisfactory.”
But Kudlow, the director of the National Economic Council, said the presidents’ meeting offered a rare chance to break the deadlock between the world’s two largest economies, which account for roughly 40 percent of global output.
“President Xi has an opportunity to change the tone and the substance of these talks. It’s a big opportunity,” Kudlow said. He later added, “They have to do more.”
Still, just days before the two men are set to meet over a working dinner Saturday after the Group of 20 leaders’ summit in Buenos Aires, plans remained fluid. The list of those attending — including the question of whether the presidents’ spouses will join them — and the agenda were a work in progress.
“This is a big deal, this meeting, and the stakes are very high,” Kudlow told reporters at the White House. “President Trump has a terrific track record as a negotiator, and he will know through facts and instincts how to handle this. And my suspicion is that President Xi, likewise.”
Later, at a White House press briefing, Kudlow said that Trump believes there is “a good possibility” that a deal can be made but that “certain conditions have to be met with respect to fairness and reciprocity.”
“I think we are in far better shape to weather this than the Chinese are,” Kudlow said, noting that Trump has said in recent days that “if things don’t work out in this U.S.-China summit meeting, he will invoke another $267-some-odd billion in tariffs.”
The United States and China have been locked in an escalating trade conflict for much of this year. Trump has slapped tariffs on $250 billion in Chinese products, supported new limits on Chinese investment in the United States and taken steps to restrict exports of advanced technologies to China, saying Beijing has treated U.S. companies unfairly for decades.
Earlier this year, the Office of the U.S. Trade Representative produced a voluminous study that assailed China for coercing U.S. companies into surrendering their trade secrets in return for access to the Chinese market, pilfering American technology via cybertheft and violating global trade rules.
Robert E. Lighthizer, the U.S. trade representative, said in an update this month that China “has not fundamentally altered its unfair, unreasonable, and market-distorting practices” despite U.S. complaints.
Chinese officials are hoping to persuade Trump to pause his plans to increase tariffs on $200 billion in Chinese goods from 10 percent to 25 percent on Jan. 1. The president this week told the Wall Street Journal that it was “highly unlikely” that he would scrap the planned increase.
The president renewed his threat to impose tariffs on the remaining $267 billion in products that the United States imports from China. Kudlow said those measures could take effect if no headway is made during the summit.
“There’s a gap,” he said. “I hope we can bridge that gap.”
U.S. and Chinese officials have held frequent conversations “at all levels” in the run-up to the two leaders’ scheduled meeting, Kudlow said, but apart from the dinner, there are no other planned meetings between the two sides during the two-day summit.
Kudlow, who said he had never visited China before joining the administration in April, said he was “not so sure” whether the two governments would issue a joint statement after the dinner.
He left open the possibility that additional talks at the staff level could follow the presidents’ meeting.
Chinese officials may be hesitating about offering concessions because they are flummoxed by Trump, Kudlow suggested. “Maybe China’s not accustomed to dealing with a strong president who will not relent,” he said, adding that Trump’s predecessors from both parties had offered “only lip service” to addressing Chinese trade cheating.
Kudlow also touted the U.S. economy’s strength, saying it gave the president an advantage in the bargaining with Xi. “We’re strong. They’re not, from an economic standpoint,” he said. “I like the position we’re in.”
Felicia Sonmez contributed to this report.