Even Donald Trump’s own economic advisers don’t believe his claims that the trade war with China is a win for the U.S.
Larry Kudlow, the director of the National Economic Council, told Fox News on Sunday that “both sides will suffer” if the escalating trade war continues, admitting that U.S. businesses and consumers will be hurt by the raised tariffs the administration approved on Friday.
But Trump insists the tariffs are a huge victory for the American economy.
“We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China,” Trump tweeted Sunday, before warning Beijing “the deal will become far worse for them if it has to be negotiated in my second term.”
Talks between the two sides broke down in Washington last week, and while U.S. officials were invited to China for another round of talks, no date has been set. Trump could intervene directly: Kudlow said Sunday there's a strong chance that the president will meet with his Chinese counterpart, Xi Jinping, at the G20 summit in Japan next month.
China said Friday it would respond to the tariff increase, which saw duties on $200 billion worth of Chinese imports rise from 10 percent to 25 percent, with “necessary countermeasures,” but it has yet to outline what those steps will be.
“The U.S. wielded the tariff stick once again because of its misjudgments on China’s strength, capability, and willpower,” Beijing said in an op-ed published in the state-run China Daily on Monday.
China says it is prepared to weather a prolonged trade war, and one former government minister warned that beyond tariffs, Beijing still has many ways to hit back against the U.S., including sanctioning U.S. planes and vehicles to make it more difficult for American companies to get goods into China.
“China will not only act as a kung fu master in response to U.S. tricks but also as an experienced boxer and can deliver a deadly punch at the end,” Wei Jianguo, a former vice-minister at the Ministry of Commerce, told the South China Morning Post.
“China will not only act as a kung fu master in response to U.S. tricks but also as an experienced boxer.”
The talks between Washington and Beijing that ended last week were the 11th round of negotiations, and while officials have described the talks as constructive, the U.S. has accused China of reneging on promises they made earlier in the negotiating process.
Central to the conflict is Washington’s determination to get Chinese companies to end the practice of forcing U.S. companies to hand over their technology in exchange for access to the Chinese market — a practice that has helped turn Chinese companies into global leaders in areas like robotics, electric cars and other advanced industries.
“You’ve got to do what you got to do,” Kudlow told Fox News. “We have had unfair trading practices all these years and so in my judgment, the economic consequences are so small that the possible improvement in trade and exports and open markets for the United States, this is worthwhile doing.”
Cover: Director of the United States National Economic Council Larry Kudlow speaks to members of the media at the White House on May 3, 2019 in Washington, DC. (Photo by Oliver Contreras/SIPA USA)(Sipa via AP Images)