WH Economic adviser Larry Kudlow joins ABC's George Stephanopoulos to update us on trade talks with China. A high-level delegation of Chinese diplomats recently left Washington after inconclusive negotiations on trade with the Trump administration.
When asked if any agreement was reached during the negotiations, Kudlow said: "There's no agreement for a deal. We never anticipated one. There's a communique between the two great countries, that's all."
Kudlow then commented on President Trump’s position regarding ZTE, the Chinese cell phone company President Trump tweeted about last week, saying: "President Xi asked President Trump to take another look at it. This may be part of the overall trade discussion, but it really is an enforcement action, it's a legal enforcement action with the process being run by the Commerce Department …Do not, please, do not expect ZTE to get off scot-free. It ain't gonna happen."
STEPHANOPOULOS: The talks went on through Friday evening. White House and Chinese put out a statement yesterday, a joint statement. Now this joint statement did not include any specific commitment to reduce the trade deficit by the Chinese by $200 billion.
Going into the meetings, you had said they had agreed to do that. But the White House was pushing very, very hard for that kind of reduction.
So did these talks fail?
LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: I don't know, George, certainly not. Look, I never said we agreed to do that. I said, in fact, there was no deal but, regarding the number 200, first of all, that's a number that interests the president a lot.
And both sides, I was in Beijing as well as Washington. Both sides have used that as rough ballpark estimate. I mean, here's the thing.
STEPHANOPOULOS: But the Chinese say they haven't, though.
KUDLOW: Well, I don't know. I mean, I've been informally -- I have heard that number from them. It depends how you count things.
Look it, here's the key point, if I may, in the communique there was a consensus on taking effective measures to substantially reduced the United States's trade deficit in goods with China. That's the key point.
And here's the second key point, they are offering to make structural reforms, such as lower tariffs and lowering non-tariff barriers, which will permit us to export billions and billions more goods to China. That's the elementary point. That's the key point.
These numbers, you can't predict these numbers. I mean, these are macroeconomic things
depending on conditions. But what I want to say is, we made a lot of progress here in Washington and built on what happened in China a couple weeks back. The president is in a very positive mood about this. So, I myself, am very encouraged, because, look, at the end of the day, George, growth, this is
good for growth. This helps our farmers, this helps our ranchers, this helps our businesses.
I actually think it's good for Chinese growth, too.
STEPHANOPOULOS: I know you are encouraged, but just to be clear, is there an agreement or not?
KUDLOW: There's no agreement for a deal. We never anticipated one. There's a communique between the two great countries, that's all. And in that communique, you can see where we're going next. For example, Commerce Secretary Wilbur Ross going over to China. He's going to be looking into a number of areas where we're going to have greatly, significant increases -- energy, for example, LNG, for example, agriculture, manufacturing.
Again, as the tariffs come down and the barriers come down, that gives us an opportunity for greatly increased export sales. And, you know, you've got to trust, but verify -- Ronald Reagan taught me that a long time ago -- but I like the direction we're going in.
STEPHANOPUOLOS: There's also no mention in the communique of this Chinese telecom firm ZTE that the president tweeted about last week Sunday saying he wanted to find a way to get it back into business, despite the fact that it's been subject to U.S. sanctions, because of its work with Iran and North Korea. A bipartisan consensus on Capitol Hill that that would be a mistake. Where does that stand?
KUDLOW: President Xi asked President Trump to take another look at it. This may be part of the overall trade discussion, but it really is an enforcement action, it's a legal enforcement action with the process being run by the Commerce Department, I guess the Justice Department as well.
Look, I don't know how this is going to turn out. Again, Wilbur Ross is having Campo look at this.
Let me just say with as much clarity as possible, if any of the remedies are altered, they are still going to be very, very tough, including big fines, compliance measures, new management, new boards. The question is whether there are perhaps some small changes around the edges. I think President Trump is doing this because there's some very good feeling between him and China.
Do not, please, do not expect ZTE to get off scot-free. It ain't gonna happen.