Washington and Beijing are working actively to revive negotiations aimed at ending the trade war that has rattled world markets, Donald Trump’s chief economic advisor said Sunday.
If teleconferences between both sides’ deputies pan out in the next 10 days “and we can have a substantive renewal of negotiations,” Larry Kudlow said on “Fox News Sunday,” “then we are planning to have China come to the USA and meet with our principals to continue the negotiations.”
That left it uncertain, however, whether a Chinese delegation would be coming to Washington next month, as a White House spokesperson predicted after US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin left a round of trade talks in Shanghai in July.
But Kudlow emphasized that phone conversations held last week to follow up on the Shanghai talks — involving Lighthizer, Mnuchin and two senior Chinese negotiators, Vice Premier Liu He and Commerce Secretary Zhong Shan — were “a lot more positive than has been reported in the media.”
World financial markets have been on edge amid a series of signs pointing to a slowing of the global economy — notably because of the trade war between the world’s two largest economies — and have been reacting to even the slightest new indicator.
– No fear of ‘optimism’ –
But Kudlow insisted that the outlook was far from gloomy. “Let’s not be afraid of optimism,” he said, adding that “I sure don’t see a recession.”
The US-China negotiations began in earnest in January and seemed at first to make substantial progress, raising hopes that a trade deal could be rapidly reached.
But during the spring, the US president abruptly called off the talks, saying the Chinese had reneged on earlier commitments.
The discussions resumed again in June at the highest levels in the margins of the G-20 summit meeting in Osaka, Japan between Trump and his Chinese counterpart Xi Jinping.
But markets were hit with a fresh surprise when Trump suddenly announced that as of September 1 he was imposing punitive 10-percent tariffs on $300 billion in Chinese goods that had so far been spared.
And then came the announcement Tuesday that Trump — already campaigning for re-election in 2020 — had decided to delay imposing the tariffs until December 15 so as not to cast a shadow on the Christmas shopping plans of Americans.
The delay was seen as a concession to China and a backhanded admission that the tariffs — despite Trump’s repeated insistence to the contrary — could in fact have an impact on US consumers.
– Impact on US denied –
Nonetheless, the president’s chief trade advisor, Peter Navarro, firmly rejected that notion in several television appearances on Sunday.
He said Trump had decided on the postponement only after several company heads told him their contracts with Chinese suppliers were denominated in dollars, meaning they got no benefit from the weakening of the Chinese yuan and their orders ahead of the year-end holidays would be hard-hit.
Navarro said the executives also insisted they were increasingly looking to suppliers outside of China.
He vigorously rejected the notion that the tariff war is hurting American consumers, saying no data supported that view — despite studies to the contrary by the International Monetary Fund, Harvard University and the Federal Reserve Bank of Boston.
“We’re seeing production investment and supply-chain sourcing move — hemorrhaging from China,” Navarro said, with Southeast Asia and the US benefiting.