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Trump says deal with China is still possible, but tariffs are an 'excellent' alternative

Key Points
  • President Trump says tariffs are an "excellent" alternative to a trade deal with China.
  • Trump's remarks came hours before Chinese officials were set to meet U.S. trade negotiators later in Washington.
  • Asked if he would speak with Chinese President Xi Jinping, Trump says, "Well, he just wrote me a beautiful letter, I just received it, and I'll probably speak to him by phone."
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Trump says he has an 'excellent alternative' to a China trade deal

President Donald Trump said Thursday that tariffs are an "excellent" alternative to a trade deal with China, hours before Chinese officials were set to meet U.S. trade negotiators later in Washington.

Negotiators for the U.S. and China will meet at 5 p.m. ET, Trump said. He had set a midnight deadline to slap additional tariffs on China, though he has suggested that his administration might reverse its decision depending on progress in the negotiations.

"They'll see what they can do," Trump said at a White House event Thursday afternoon. "But our alternative is an excellent one."

"It's an alternative I've spoken about for years. We'll take in well over a hundred billion dollars a year. We never took in 10 cents from China," Trump said, referring to additional tariffs he promised to impose. "And I think it'll be a very strong day, frankly. But we'll see."

Fact-checkers have said Trump's claim that tariffs on China will yield $100 billion annually — a claim he had tweeted a day earlier — is inaccurate.

Trump added: "It was their idea to come back."

But Trump struck a more optimistic tone when asked if he would speak with Chinese President Xi Jinping. "Well, he just wrote me a beautiful letter, I just received it, and I'll probably speak to him by phone," Trump said.

The president said Xi's letter expressed a desire to come to an agreement. "Let's work together, let's get something done," Trump said, describing the letter.

After Trump's comments at the White House, stock indexes recovered from ground lost stemming from worries stirred up by his comment Wednesday night that China "broke the deal." Before Trump's remarks Thursday afternoon, the Dow Jones Industrial Average had fallen more than 400 points.

President Donald Trump delivers remarks in the Roosevelt Room at the White House in Washington, May 9, 2019
Jonathan Ernst | Reuters

The president said it might be possible for China and the U.S. to strike a deal this week.  "It's possible to do it, they're all here. The vice premier one of the most respected men one of the highest officials in China is coming," he said.

China's Vice Premier Liu He, the highest-profile member of the Chinese delegation, is set to dine with Trump's trade team Thursday evening, just a few hours before the deadline Trump set to slap a new round of tariffs on $200 billion in Chinese goods. U.S. Trade Representative Robert Lighthizer is set to attend, along with other U.S. officials.

On Wednesday, China promised that Beijing would retaliate if the U.S. followed through on its threat to hike tariffs on $200 billion of Chinese goods to 25% from 10%.

Trump took many on Wall Street by surprise on Sunday, when he announced that the U.S. tariffs would rise to 25% on Friday in light of attempts by the Chinese to renegotiate terms of the deal. China responded on Wednesday, promising to take "necessary countermeasures" against the U.S. if Washington follows through on its threat.

--CNBC's Jacob Pramuk and Everett Rosenfeld contributed to this report.