With just over three weeks left in the trade truce, White House economic advisor Larry Kudlow said Thursday that the U.S. and China have “a pretty sizable distance” to go before a deal can be reached.
A delegation from the U.S. is scheduled to head to Beijing next week for another round of talks with their Chinese counterparts. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer will lead the U.S. side.
“The president has indicated that he’s optimistic with respect to a potential trade deal,” Kudlow said in an interview on Fox Business. “But we’ve got a pretty sizable distance to go here.”
China has already agreed to increase its purchases of U.S. products, including soybeans grown on American farms. But on Wednesday, Mnuchin told CNBC that the administration would not be satisfied unless the more complex structural issues involving forced technology transfers and joint-venture requirements were resolved.
“Soybeans are important to our farmers. We are a big supplier of soybeans. But let me just say, this soybean issue has been exaggerated and there’s a little too much focus on just the purchase of soybeans. That’s one of a lot of issues. And we’re really focused, as we’ve talked about, on the structural issues,” Mnuchin said.
Mnuchin said that one of the unresolved issues is how to enforce any agreement reached between the U.S. and China.
“One of the things that’s very important to us is if there is a deal that it’s an enforceable deal. We don’t want this to be an agreement that’s not enforced. We need to do a little bit more work on the mechanism,” he said.
Kudlow on Thursday said the talks so far had “good vibes.””
“We covered a tremendous amount of ground and all the major issues,” Kudlow said. “All of those things are on the table and discussed in some detail. I think those conversations are going to continue.”
U.S. stocks took a significant dip after Kudlow’s interview on Fox Business.