White House adviser Larry Kudlow says tariff hikes 'still on table,' sees progress on US-China deal

WASHINGTON (BLOOMBERG) - White House Economic Adviser Larry Kudlow has said additional tariffs on Chinese goods are still possible as negotiators from the US and China hash out details of the potential first step in a trade accord.

"They're still on the table until this phase one deal is completed, or worst case not completed," Kudlow said Friday (Nov 1) in an interview on Bloomberg Television. "The president has hinted, depending on the process of phase one, he may be willing, I say may be willing, to take a look at those tariffs."

Principles from the world's two largest economies including China's Vice Premier Liu He, US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer are holding meetings by phone on Friday to negotiate details of a phase one deal that was announced Oct 11.

"The mood music has been very positive, very constructive," Kudlow told reporters Friday of the discussions.

Kudlow's comments came before a ruling by the World Trade Organization on Friday that awarded China permission to impose US$3.6 billion (S$4.9 billion) in sanctions against the US. The case predates the tariff war between the two nations but may add a layer of tension to ongoing talks.

Negotiators are close to finishing details of the pact on China's increased purchases of US agriculture products, currency stability and opening of financial services markets to American firms, Kudlow said. They've also made "excellent progress" on the issue of intellectual property theft, he said. Disputes around so-called forced tech transfer will likely not be resolved until a possible phase two of the deal.

Both countries are seeking an alternate location to sign a deal, if they reach one, after Chile cancelled a summit this month where President Donald Trump and China's leader Xi Jinping were aiming to meet.