White House economic adviser Larry Kudlow said President Donald Trump would consider extending the 90-day tariff truce with China if “good” progress is made in trade talks.
The veteran financial guru and former Ronald Reagan adviser expressed optimism that the United States and China will make substantial progress during the 90-day period allocated for talks, ending around March 1.
“I think there will be a lot of success in the next 90 days," Kudlow, director of Trump’s National Economic Council, told CNBC.
“The president has indicated if there’s good, solid movement and good action, he might, he might be willing to extend the 90 days. We’ll have to see on that,” said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
Kudlow said the trade talks with China are “extremely promising.” But CNBC.com reported that he stressed, “Before I run away with optimism: Trust but verify” and make sure promises made are “promises kept.”
Kudlow reiterated that the Trump administration was expecting immediate movement from China on purchases of agricultural commodities and energy and added that he expected Chinese autos tariffs to be reduced. He said it was a positive sign that China was willing to discuss core issues related to intellectual property theft, forced technology transfers and computer hacking of U.S. companies.
However, Kudlow said U.S. Trade Representative Robert Lighthizer, who will lead the American side in the talks, will be looking to ensure that any agreements can be fully enforced and monitored to ensure follow-through by Beijing.
Trump on Friday sounded an optimistic note about trade negotiations with China as two of his top economic and trade advisers downplayed friction from the arrest of a senior executive of Chinese telecom equipment maker Huawei Technologies.
“China talks are going very well,” Trump said on Twitter, without providing any details.
Major companies have expressed concerns about the how the arrest of Huawei Chief Financial Officer Meng Wanzhou in Canada at the request of U.S. authorities would affect U.S.-China relations or that it would cause a potential backlash against American firms operating in China, Reuters reported.
But Kudlow also told CNBC he did not believe Meng’s arrest would “spill over” into the talks with China aimed at increasing Beijing’s purchases of U.S. farm and energy commodities, lowering Chinese tariffs and sweeping changes to China’s policies on intellectual property and technology transfers.
Kudlow said the investigation of whether Huawei violated U.S. sanctions against Iran were on a “separate track” from the trade talks and was a matter of national security and U.S. law.
“You can’t break the law. You break the American law, you break the Canadian law, you’ve got to pay the consequences of that,” Kudlow said of the Huawei case. “That was the case with other companies, and will continue to be the case. These are issues of national security.”
White House trade adviser Peter Navarro also told CNN that the U.S.-China trade talks and the Huawei arrest “are two separate events,” calling the timing of Meng’s arrest a coincidence.
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