MNI POLICY: Kudlow Says No Time Limit on US-China Trade Talks

--Trump adviser makes comments with bilateral negotiations opening this week

By Greg Quinn

     WASHINGTON (MNI) - Donald Trump's main economic adviser said there is no

time limit on Chinese trade talks and in the meantime President Xi Jinping must

keep a promise to import more American farm products.

     Negotiations must undo two decades of China's unfair practices and the

remaining 10% of issues such as alleged technology theft are the most difficult,

Larry Kudlow said at a CNBC event Tuesday. Xi must oversee major purchases of

U.S. goods such as soybeans, wheat and possibly energy, he said.

     "President Xi is expected we hope, in return for our accommodations, to

move immediately, quickly, while the talks are going on, on the agriculture

front," Kudlow said. "That's very, very important."

     Talks due to resume this week will shift the tone from Trump's prior

threats to slap 25% tariffs on another $300 billion of imports from China. Risks

of a trade war between the world's two largest economy have led central banks

around the world to consider adding new stimulus to boost growth.

     Any deal must come with deep changes to Chinese law that address misuse of

U.S. technology and non-tariff barriers, Kudlow said. "China has engaged in

persistent, unfair and frequently WTO illegal trading practices" over the last

two decades, he said. 

     Chinese officials have rejected the idea they are to blame for trade

imbalances and any deal must result in the removal of all U.S. tariffs. China

has also signaled it's prepared for more U.S. retaliation if talks fail. 

     Kudlow sounded a few optimistic notes on trade with China and North

America. He said a China agreement is possible and the leaders' backing new

talks at the G20 in Japan last month is a good sign. "It's always better to talk

than to not talk," he said.

     The new U.S. trade deal with Canada and Mexico is a model and should be

passed immediately by Congress, Kudlow said. One reason the so-called USMCA pact

works is language that discourages those nations from unfair manipulation of

their currencies, he said.

     Trump also returned to Twitter on Tuesday to discuss his claims the United

States needs new deals to end unfair trade practices. "Trade deals being

negotiated or being set up for negotiation. We have been treated very unfairly

(to put it mildly) by other countries for many years, but that is changing!"

Trump wrote.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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