President Donald Trump is considering a plan that would send Chinese leader Xi Jinping a list of demands that would include the removal of certain tariffs on American-made goods as a way to de-escalate intensifying trade turmoil between both countries, a top White House adviser said Friday.
Larry Kudlow, director of the National Economic Council, said no decision has been made so far, but he described China's response to Trump's trade threats so far "unsatisfactory."
"You might see the United States may provide a list of suggestions to China as to what we would like to see come out of this," Kudlow told reporters.
In the meantime, Kudlow said, Trump would continue standing up to Beijing and escalating things if necessary.
"What this is is an attempt by a strong-willed, strong-backboned president to right some wrongs... with respect to China," he said.
Trump and China are in a broadening trade tit-for-tat that began several weeks ago and grew this week, with the world's two largest economic powers threatening a series of trade restrictions on each other. The threats have spooked financial markets, in part because the Trump administration has given different explanations for what Trump is trying to do.
Kudlow, who is in his first week on the job as Trump chief economic adviser, has tried to exude calm, while Trump has continued to blast China in public statements and social media posts.
On Friday, Kudlow said the trade tensions are a result of China's economic aggression and several decades of weak responses from Democrats and Republicans in Washington.
Before joining the White House, Kudlow, as a CNBC commentator, was critical of Trump's threats to impose tariffs on steel and aluminum imports, warning it could harm the U.S. economy. But he told reporters Friday that these threats are necessary to force Beijing to eliminate trade barriers and allow more U.S. products into China.
"I'm not a tariff guy," Kudlow said. "I don't like to use them, but sometimes you have to use tariffs to bring countries to their senses."
In March, Trump began the process of imposing tariffs against steel and aluminum imports, alleging that a range of countries were flooding the U.S. with cheap metals in a way that harmed U.S. workers. He has since exempted most major steel and aluminum producers from these tariffs, except for China.
In response, China listed 128 items that it planned to impose tariffs against, including pork and a range of agricultural items. Then Trump pledged new tariffs against China, leading China to pledge even broader tariffs against U.S. exports such as automotives.
This led Trump on Thursday evening to issue a statement saying he is considering additional tariffs on $100 billion in other Chinese imports, which would represent 20 percent of all the items China sends the U.S. each year.
Kudlow said this response from Trump was prompted by the White House's view that China was trying to escalate the dispute and not resolve it.
"The Chinese response to our first part of the process was... highly unsatisfactory," Kudlow said.
China exports far more to the United States than vice versa, a fact that Trump has said is due to improper economic practices in Beijing. China has often refuted this, but other countries have also complained that China should do more to open its markets and stop subsidizing key industries in a way that gives them an unfair advantage.
Other countries, though, have preferred a multinational approach in confronting Beijing, something Trump has said he doesn't believe works. His adversarial tactics this year have confused world leaders but also sent a signal that the U.S.'s approach to China has changed markedly.
Kudlow said this would continue until Chinese leaders agreed to change how they participate in the global economy. He said China was no longer a third-world, developing country, and they should be held to the same standards as other economic powers.
"They have very tall barriers to trade," Kudlow said. "They are stopping our exports. They have very high tariffs in a number of key places. That's all got to stop too. And these are things that could be put on the table for discussion, but they won't at the moment. That may change. I hope it will. There are all kinds of backchannel discussions going on."