Larry Kudlow, the White House’s top economic adviser, says Chinese President Xi Jinping is standing in the way of a resolution to its trade fight with the United States.
“I believe from my experience–two days in Beijing, a day in Washington, D.C., and a long dinner in Washington, D.C. I believe China wants to make a deal.
But–in so far as we know–president Xi, at the moment, does not wish to make a deal,” Kudlow said Wednesday at CNBC’s Delivering Alpha investing conference in New York.
Kudlow indicated that the Chinese government was divided, with some of its leading economic advisers favoring making a deal while its president’s opposition ultimately blocks any progress despite multiple rounds of negotiation between the two countries.
“They haven’t responded at all. Not one basis point to our request to do something about the theft of intellectual property and the forced transfer of our technology,” Kudlow says. “Our sources are telling us that the Chinese government realizes they are wrong. I hear this repeatedly from my sources, and yet as of today, they have refused to act on it. They know they are wrong, they know the rest of the world knows they are wrong…And something has to be done here.”
Kudlow traveled with the delegation of U.S. economic and trade officials to Beijing in May and participated in meetings in Washington, D.C. that followed. Initially, the U.S. expressed optimism about the meetings but recent comments from the administration have been much less positive. President Trump recently instructed trade officials to prepare a list of $200 billion of additional tariffs that could be put on imports from China.
“Xi is holding the game up. He needs to move. We are waiting for him. The ball is in his court. The tit-for-tat business, they can end that this afternoon by providing a more satisfactory approach,” Kudlow said.
Kudlow, who has long described himself as a free trader, said that Trump sees himself as a free trader who is fighting to bring down barriers placed against U.S. goods and services around the world.
“President Trump inherited this mess and a broken trading system. If you talked to him as I have, and I wrote an op-ed piece about this on the first day of G-7, he sees himself as a free trader. Don’t blame Trump. Blame China. Blame Europe,” Kudlow said. “Let’s have no tariffs. Let’s have no trade barriers. Let’s have no subsidies.”
Kudlow said that China is the primary bad-actor in global trade.
“I have been a long-term critic of China. I think the president is doing exactly the right thing here. This should have been done years ago. The world trading system is broken. The Wolrd Trade Organization is broken. The biggest culprit is China,” Kudlow said. “They do in fact steel our intellectual property left and right. We can’t let China steal our technology, Jimmy. ”
Kudlow was interviewed by CNBC host Jim Cramer. The two once anchored the network’s Kudlow & Cramer miday show.
Kudlow emphasized that Trump did not start the trade dispute with China. It has been going on for decades, according to Kudlow.
“We’ve had Republican and Democratic presidents in the past make these complaints, even take these complaints to the World Trade Organization. But they never follow through. They say it, nothing happens, life goes on. The situation gets worse,” Kudlow said.
But that has changed with the Trump administration.
“This guy–President Trump–has the biggest backbone…He will not let go of this point. Nor should he. China is going to have to come around,” Kudlow said.