U.S.-China Trade Deal Is Intact, Larry Kudlow Says

White House National Economic Council Director Larry Kudlow said Thursday the phase-one trade deal that the U.S. and China negotiated last year was intact and there were no plans to renegotiate.

Speaking during an online question-and-answer session with the Washington Post, Mr. Kudlow said Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer had spoken recently by phone with Chinese Vice Premier Liu He, China’s chief negotiator on the trade agreement.

“They reported to the president that the deal is intact, and China has every intent of implementing it,” he said.

Mr. Kudlow said China’s purchases of U.S. commodities required under the deal “are a little far behind,” likely as a result of poor economic and market conditions, but overall he is satisfied with Beijing’s compliance with the agreement.

China’s behavior on the pandemic, however, has been disappointing, Mr. Kudlow said, citing a lack of information and transparency. “They will be held accountable as investigations go on,” he said, but declined to elaborate on what that might mean.

Speaking about the U.S. economy, Mr. Kudlow said the U.S. unemployment rate could still be in double-digits when the presidential election is held in November.

The jobless rate hit 14.7% in April, the highest on record, as millions of Americans lost their jobs amid widespread business closures to contain the new coronavirus. Asked whether he expected the rate to remain above 10% on election day, Mr. Kudlow said it was possible, though the numbers could come in slightly lower.

“They’re going to be very, very tough numbers,” he said.

The Congressional Budget Office said Tuesday it expected economic activity to start rebounding in the second half of the year and continue growing through 2021. But CBO said its forecasts were highly uncertain and depended largely on the degree to which social distancing continues.

Mr. Kudlow said the White House forecast is in line with CBO’s projections, adding that real-time economic indicators suggest the turnaround has already begun.

“We’re seeing some small glimmers of hope and growth,” he said.

Mr. Kudlow reiterated that White House officials are shifting their focus from providing economic relief to households and businesses to offering incentives for businesses to invest as the economy begins to reopen.

“I do not believe that more government spending is going to give us a strong and durable recovery,” he said.
Source: Dow Jones