The United States will not rule out tariffs on China as a "negotiating" or "enforcement" tool, despite "progress" made last week during talks with Beijing, Larry Kudlow, President Donald Trump's top economic advisor, said Monday.
On Sunday, Treasury Secretary Steven Mnuchin said the world's two largest economies "are putting the trade war on hold" as they try to cement and implement the framework of an agreement addressing trade imbalances. The potential deal would involve China lowering its trade barriers and the U.S. exporting more goods such as agricultural and energy commodities.
In tweets Monday morning, Trump said China "has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products." He separately wrote that barriers and tariffs would "come down" for the "first time."
The tentative deal — the specific details of which remain unclear — would reduce trade tensions and avoid tariffs that threatened to damage the world's two largest economies. However, Kudlow stressed Monday that the U.S. would not take tariffs off the table entirely amid ongoing negotiations.
"Tariffs are suspended right now, as per Mr. Mnuchin. That's a good thing," the director of the National Economic Council told CNBC's "Squawk on the Street." "But you cannot remove tariffs as a negotiating tool or an enforcement tool from this process. You cannot do that. And therefore, I don't think we're saying tariffs are over. Far from it."
Trump had proposed tariffs on at least $50 billion of Chinese technology and other goods in response to alleged intellectual property theft by Chinese companies. Beijing threatened retaliatory tariffs that could have hurt American farmers.
In seeking a deal, the Trump administration both wanted to avoid the effects of tariffs and address Trump's longstanding grievances with China. He has long argued that Beijing takes advantage of the U.S. due to China's massive trade surplus with the U.S.
Kudlow, a former CNBC contributor, did not divulge many of the specifics of a potential deal. The "details will come later," he said Monday.
Commerce Secretary Wilbur Ross will try to hammer out some of those specifics when he travels to China in the near future, according to Kudlow.
Aside from generating more American exports to China, the agreement would possibly allow foreign firms to own more than 49 percent of their ventures in the country, which is the current cap, Kudlow said.