Echoing comments by Treasury Secretary Steven Mnuchin made during an early-afternoon interview on CNBC, National Economic Council head Larry Kudlow told a group of reporters at the White House Friday that China's response to the first round of US tariffs announced was "highly unsatisfactory" and that, while he hopes the trade dispute doesn't result in tariffs, that outcome remains a possibility.
That is in sharp contrast to Kudlow's attempt on Wednesday to assuage the fears of nervous investors by promising them that the US will likely get a deal with China to avert the trade barriers threatened by both sides.
Still, a solution to the US-China trade spat could come within three months - but the Trump administration's saber-rattling over trade barriers "is not a bluff". And while the US isn't currently in a trade war with China - any foreign policy "could go awry."
Kudlow's about-face notably comes as the White House has put its foot down on Friday and warned investors to expect some "some fluctuations" in the stock market as the trade dispute plays out.
He also raised the possibility that the US could provide a "list of suggestions" to China, per the Hill.
"The U.S. may provide a list of suggestions to China," White House National Economic Council Director Larry Kudlow told a group of reporters at the White House, adding that resolving the trade dispute between Washington and Beijing is "eminently doable."
These latest comments come after Kudlow gave a contentious interview with Bloomberg earlier Friday where he said that serious talks to avert a trade crisis "have not really begun yet" while clarifying that Trump had discussed the issue with Chinese President Xi Jinping and that other senior administration officials had discussed trade policy with their Chinese counterparts.
"Perhaps there will be some fruitful negotiations," he said. "But I would say they have been unsatisfactory, so we will see". The US is considering a second round of tariffs, but nothing has been decided yet.
But regardless of the outcome, Kudlow has insisted that "China is the problem" and that "President Trump is the solution."
However, investors would have good reason to ignore Kudlow's comments, as the advisor admitted that he first found out "last night" about Trump's threat to slap tariffs on $100 billion in Chinese assets. Those followed China's announcement of tariffs on $50 billion of US goods, including, crucially, the US soybeans, which China relies on to feed its livestock.
"This is not a trade war," Kudlow said Friday. "This process, it may include tariffs at the end of the day. It may also not. It may be solved by negotiation," according to Politico.
After Bloomberg hammered Kudlow about the White House's "communication problem," Kudlow's admission that he was out of the loop regarding the latest round of tariffs prompted some twitter users to question whether Kudlow has as much influence with the president as the market believes...
Holy crap. Larry is making suggestions to Trump via Bloomberg TV. Can't he just walk into the Oval Office and tell him? Oh, wait.— Ivan the K™ (@IvanTheK) April 6, 2018