US, China on verge of 'historic' trade deal, says White House economic adviser Larry Kudlow

The US Trade Representative's office said it will publish a notice in the Federal Register indefinitely delaying the increase of tariffs on Chinese imports.
The US Trade Representative's office said it will publish a notice in the Federal Register indefinitely delaying the increase of tariffs on Chinese imports.PHOTO: AFP
Mr Larry Kudlow listens as President Donald Trump speaks at a business session with state governors, Feb. 25, 2019.
Mr Larry Kudlow listens as President Donald Trump speaks at a business session with state governors, Feb. 25, 2019.PHOTO: NYTIMES

WASHINGTON (BLOOMBERG) - The US and China are on the cusp of an "historic" agreement that would commit Beijing to cut subsidies for state-owned companies and disclose when its central bank intervenes in currency markets, a top White House adviser said.

"The progress has been terrific," Mr Larry Kudlow, director of the White House's National Economic Council, said in an interview on Thursday (Feb 28) on CNBC.

"We have to hear from President Xi and the Politburo of course, but I think we're headed towards a remarkable historic deal."

The Chinese have pledged to "significantly" reduce subsidies to state-owned firms as part of a potential deal, as well as to disclose when the nation's central bank buys and sells foreign currency, Mr Kudlow said.

The Asian nation has also pledged to "de-emphasise" its plans to dominate in emerging technologies, outlined in its Made-in-China 2025 plan, he added.

Mr Kudlow cautioned that the US-China accord still needs to be approved at the highest levels of the Chinese government.

It's likely President Donald Trump will meet Chinese President Xi Jinping next month at the US President's resort in Mar-a-Lago, Florida, Mr Kudlow said.

 
 
 

Mr Kudlow's bullish comments come only a day after Mr Trump's top trade negotiator struck a more cautious tone, warning US lawmakers that more work needs to be done and declaring that the administration will not accept a deal that does not include significant "structural" changes to China's state-driven economy, as well as a strong enforcement mechanism.

Treasury Secretary Steven Mnuchin in a CNBC interview that followed Mr Kudlow's remarks echoed the more cautious tone from Lighthizer, saying "the deal is not done yet but we've made a lot progress".

He rejected any suggestion that the administration was divided in its approach to China, saying US officials taking a united front in the negotiations.

The US Trade Representative's office said on Thursday it will publish a notice in the Federal Register indefinitely delaying the increase of tariffs on Chinese imports.

Mr Trump had previously planned to raise tariffs on March 1, but dropped the threat amid progress at the negotiating table after the most recent round of talks that ended on Sunday in Washington.