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U.S.-China trade conflict could take years to resolve: Kudlow

EconomySep 06, 2019 06:23PM ET
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© Reuters. Director of the National Economic Council Larry Kudlow speaks to the media at the White House in Washington

By David Lawder and Roberta Rampton

WASHINGTON (Reuters) - White House economic adviser Larry Kudlow said on Friday the United States wants "near term" results from U.S.-China trade talks in September and October but cautioned that the trade conflict could take years to resolve.

Speaking to reporters outside the White House, Kudlow said that although the United States and China have been negotiating on trade and intellectual property issues for 18 months, that was a short period of time in terms of what was at stake and negotiations could go on much longer.

"A deal of this size and scope and central global importance, I don't think 18 months is a very long time," Kudlow said.

"The stakes are so high, we have to get it right, and if that takes a decade, so be it," Kudlow added, drawing parallels to U.S. Cold War competition against the Soviet Union.

But in confirming talks between high-level U.S. and Chinese officials in early October, Kudlow declined to predict outcomes or a specific timeline for reaching any agreements.

The plans for the first in-person U.S.-China trade meetings since late July were set during a phone call on Thursday between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Trade deputies are due to meet in mid-September.

BACK TO MAY

The 14-month U.S.-China trade war has escalated sharply since May, when talks broke down after Beijing backtracked on earlier commitments to make changes in law to improve intellectual property protections, curb the forced transfer of U.S. technology to Chinese firms and improve U.S. access to Chinese markets.

Since then, U.S. President Donald Trump has sharply increased existing tariffs on $200 billion worth of Chinese goods and imposed or scheduled new tariffs on virtually all remaining imports from China to increase his negotiating leverage.

Kudlow told Bloomberg TV that he could not speculate on whether the September or October talks could delay a planned tariff increase on Oct. 1 to 30% from 25% on $250 billion worth of Chinese goods.

"We would like to go back to where we were last May, but I don't know if that's possible, and I don't want to predict any outcomes. This is a difficult matter," told reporters at the White House.

He also said that it was important that Chinese reforms be reflected in changes to its laws and that any deal must have enforcement provisions to ensure that China lives up to its commitments.

EVERYTHING ON TABLE

He said on Fox Business Network that the September and October talks would cover all of the core issues in the dispute.

"Everything will be on the table. You can rest assured, for example, the absolute key structural issues - the IP theft, the forced transfer of technology, the cyber space, the clouds, financial services, all of that will be on the table - agriculture purchases, industrial purchases, energy purchases, getting tariff and non-tariff barriers down," Kudlow said.

While there were no precondition talks, Kudlow told Bloomberg TV that the Trump administration wants "to see results in the near term."

"When we don't see results, we take additional actions," Kudlow said. "On the other hand, if we do see results from these upcoming meetings, then progress will be made."

Trump said on Twitter that China was hurting economically from the U.S. tariffs but that the new round of talks were positive.

"'China is eating the Tariffs,'" Trump tweeted. "Billions pouring into USA. Targeted Patriot Farmers getting massive Dollars from the incoming Tariffs! Good Jobs Numbers, No Inflation(Fed). China having worst year in decades. Talks happening, good for all!"

U.S.-China trade conflict could take years to resolve: Kudlow
 

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Comments (6)
Zoltan McVeigh
Zoltan McVeigh Sep 08, 2019 11:12AM ET
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I love all the Chinese economic advice for the US economy. Buyers are harder to find than sellers. Simple economics. The US is the single largest economy with others many willing to manufacture the products Americans want. Give it time and supply chains will eventually fulfill that demand. The money from the US market that was going to China will just go to someone else.
Al Vlaj
alvlaj Sep 08, 2019 11:12AM ET
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Actually, from a PPP standpoint, which is the prudent way to measure GDP, China’s economy is actually 1.3x the size of the US. Because they are still growing at a much faster pace than us, they will be a larger economy than the US from nominal standpoint as well.
Al Vlaj
alvlaj Sep 08, 2019 11:12AM ET
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Al Vlaj they also have 4x the “buyers” than we have. Their companies are already starting to reposition to sell to their own people. They can easily self sustain where the US cannot because our workers require $50/hr plus bennie and pensions just to roll out of bed.
David David
David9 Sep 06, 2019 9:28PM ET
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I have been telling you guys ... I don't think it will take long. As soon as US enters recession and companies starts to layoff people, Trump will have no choice but to pick up a Huawei phone, and call President Xi up and said he was wrong, and Xi was right. And he will ask Xi to go easy on him and signed a 50-50 benefit deal. That's hiw it's going to be.
Limin Tandiono
Limin Tandiono Sep 06, 2019 9:28PM ET
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This was exactly how Trump operated while he dealt with his own business... Brag in advance, later backed off while he realized he was losing.
Kwangbin Lee
Kwangbin Lee Sep 06, 2019 9:28PM ET
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ok whatever u say is right
Erski Gumby
SB20 Sep 06, 2019 9:28PM ET
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That’s just a Chinese fantasy. Because China is not hurting at all. lol
Al Vlaj
alvlaj Sep 06, 2019 8:09PM ET
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It might take a decade he says? Trump said they are easy to win i thought. Hey farmers, i hope you arent in debt cuz you aint gettin paid for 10yrs...
YC Teng
YC Teng Sep 06, 2019 7:47PM ET
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Looks like Trump going for truce next month so he can focus on squeezing Powell and re-election.Japan relented, South Korea will pay for most of US military expenses in their country, Europe avoids 25% tariffs on their exported Mercedes and BMW, Canada changes their PM and Australia continues to do US bidding...Let's see whether Democrats can have a stronger candidate to topple Trump?
Erski Gumby
SB20 Sep 06, 2019 7:47PM ET
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The democrats so not have a good candidate who can stand up to China.
Erski Gumby
SB20 Sep 06, 2019 7:47PM ET
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*do
Joseph Obrzut
jzut Sep 06, 2019 7:18PM ET
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Can you imagine this excrement going on for years!!!??? I hope to *****his supporters undo their optical rectumitis (head up there behind) and get sick and tired of this going on and US paying for the tariffs and express there opinion Nov 3rd 2020.
YC Teng
YC Teng Sep 06, 2019 10:18AM ET
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Trump needs 2 element to have a chance for reelection:1) Fed to cut at least 1% more by June 2020. 2) Trade deal / truce with China.
 
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