White House economic adviser Larry Kudlow said on Tuesday that the both the United States and China were working toward resolving the current dispute that some economists have warned verges on a trade war.
"So far the Chinese have been coming back with more construction reaction," Kudlow said during an interview with CBS, adding that any possible tariffs on Chinese imports may not be levied for months.
President Donald Trump has threatened to impose tariffs on $150 billion in Chinese imports to the U.S. to punish China for what U.S. government officials regard as its predatory industrial policies and abuse of U.S. intellectual property. Beijing has vowed to retaliate.
Amid the rapidly rising tensions between the two sides, China has sought to seize the moral high ground as a defender of the multilateral trade system, even as U.S. allies express shared concern with Washington over Beijing’s highly restricted market.
Kudlow, the head of the National Economic Council that advises President Donald Trump, said he's "optimistic" the countries will resolve the conflict.
"Look, it's certainly not a trade war," the the veteran financial guru and former Ronald Reagan adviser said. "I think of it as a trade dispute. I think both countries would like to settle this."
He added, "Perhaps the two sides will be able to talk it through. Let's see what happens. So far, though, the Chinese are coming back with more constructive reaction."
For its part, China’s international trade representative held a series of meetings with the ambassadors from major European nations last week to ask them to stand together with Beijing against U.S. protectionism, four sources familiar with the discussions told Reuters.
Some of the western diplomats involved in the meetings with Fu Ziying, who is also a vice-commerce minister, have viewed the approaches as a sign of how anxious Beijing is getting about the expanding conflict with Washington, the sources said.
Meanwhile, Kudlow said he expects Americans will see more benefits from the new tax law as the year progresses.
"We're just getting started," Kudlow told CBS. "You've got child tax credits you're doubling, the doubling of the standard deduction, you've got lower income tax rates, you've got lower business tax rates," he said.
Businesses have been the biggest beneficiary so far because the lower corporate tax rate is allowing them to invest, CBS.com reported. citing Kudlow.
"The biggest winner right now is business investment," he said. "That is huge. Equipment, technology, software and so forth, factories. That's where the real nuts and bolts of this thing, the incentives at a lower business tax rate, both large and small."
To be sure, Trump took to Twitter to tout the economy and his sweeping tax cuts.
"So many people are seeing the benefits of the Tax Cut Bill. Everyone is talking, really nice to see!" Trump tweeted.
(Newsmax wire service Reuters contributed to this report).
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