Kudlow Doubles Down: US Will "Get A Deal" With China

After coming to the rescue of stock markets yesterday (with the Dow rallying over 800 points off the lows after he warned investors not to "overreact" to trade-related headlines) Kudlow again reassured investors on Thursday morning that the US will get a trade deal with China "over a period of time" as the latest measures are "just proposals right now" and that barriers will down on both sides.

While his Chinese peer Wang Yi was speaking at the same time in Moscow, where he called for the "international community" to maintain free trade policies, Kudlow said that he will be keeping an eye on the US dollars, provoking a spike in USD that swiftly faded, which however was also likely due to the wider than expected trade deficit...

Kudlow

Speaking to Fox Business's Maria Bartiromo (and notably not his longtime home network, rival CNBC) Kudlow toed the White House line (something his predecessor was unwilling to do) and bashed China's "unfair and illegal" actions that are "damaging to economic growth for the US, for China and for the rest of the world."

Trump is "properly weary" of China, but Kudlow said he expects that "over a period of time" the two economic superpowers will come to an agreement.

Kudlow, who said the focus of his job is "growth", added that the US economy might expand between 3% and 4% this year and that 5% growth is possible, but likely won't be sustained for long.

Moving on to the administration's rumored second tax reform plan, Kudlow said further work on tax reform could resume later this year. He said he would prefer that the Trump administration's tax reductions become permanent, also known as "Phase 2."

Kudlow also said Trump's concerns about Amazon are "very reasonable," hinting that there might be legislation to even the playing field between Amazon and brick and mortar retailers (presumably some kind of tax).

Moving on to immigration, Kudlow said the president's plan to institute merit-based immigration rules is superior to the status quo of "chain migration."

While his remarks have had no impact on price action so far, they continue to be closely watched.