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Kudlow: No China Tariff Adjustments Until Deal Is Made

Tuesday, 12 November 2019 05:31 PM

White House economic adviser Larry Kudlow said on Tuesday there will be no tariff adjustments until trade deal with China is made.

Kudlow said in a CNBC interview the United States and China have made progress on IP theft, financial services, currency stability, commodities and agriculture.

Kudlow said that the phase one agreement could include some adjustments to tariffs already in place, but neither side would agree to such steps “until the entire deal is put together.”

President Donald Trump earlier on Tuesday dangled the prospect of completing an initial trade deal with China “soon,” but offered no new details on negotiations in a campaign-style speech touting his administration’s economic record.

Markets had been on edge about Trump’s highly anticipated remarks to The Economic Club of New York, but barely moved after the speech, which contained no major policy announcements. Rumors early on Tuesday that Trump might announce a venue and date for signing a trade deal with Chinese President Xi Jinping proved unfounded.

Trump said U.S. and Chinese negotiators were “close” to a “phase one” trade deal, but largely repeated well-worn rhetoric about China’s “cheating” on trade.

“They are dying to make a deal. We’re the ones that are deciding whether or not we want to make a deal,” Trump said, echoing remarks he made on Saturday.

“We’re close,” he said. “A significant phase one trade deal with China could happen. Could happen soon. But we will only accept a deal if it’s good for the United States and our workers and our great companies.”

Trump said he would raise tariffs on Chinese goods “very substantially” if China does not make a deal with the United States. “And that’s going to be true for other countries that mistreat us too,” he added.

Trump called China “cheaters,” although he blamed the situation on past U.S. leaders.

“Since China’s entrance into the World Trade Organization in 2001, no one has manipulated better or taken advantage of the United States more,” Trump said. “I will not say the word ‘cheated,’ but nobody’s cheated better than China, I will say that.”

U.S. stocks largely drifted sideways as Trump spoke, holding onto modest gains. The S&P 500 was up about 0.3% in afternoon trade, close to a record high. The response in bond and foreign exchange markets was equally subdued.

“The only thing that’s maybe new is that he did not announce a date and a time for a signing ceremony,” Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York, said of the speech. “Where markets had been hoping for that, those hopes were dashed,” he added, saying that buying of riskier assets faded when it became apparent that no major announcement would be made.

© 2020 Thomson/Reuters. All rights reserved.

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White House economic adviser Larry Kudlow said on Tuesday there will be no tariff adjustments until trade deal with China is made.
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Tuesday, 12 November 2019 05:31 PM
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