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Ex-US ambassador to China: Waiting until the 2020 election for a trade deal hurts both sides

Key Points
  • "American consumers are at risk. Chinese workers, their businesses are at risk," says ex-diplomat Gary Locke.
  • "We need to have a reset. We need a pause. We need to get people back to the negotiating table," he adds.
  • The China tariffs are "costing American households anywhere from $800 to over $1,000 per year," Locke says.
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Former ambassador to China Gary Locke on progress toward a trade deal

Former U.S. Ambassador to China Gary Locke told CNBC on Tuesday that waiting until the 2020 election for a trade deal is going to hurt both sides.

"I don't think it's in any side's interest to wait until after the election. American consumers are at risk. Chinese workers, their businesses are at risk," Locke said on "Squawk Alley. "

"This is really a sign of deepening friction, perhaps a little bit more animosity between the top leaders of both [the] United States and China. It does not bode well for any type of a trade deal," he added, as the U.S.-China trade conflict intensified over the past few days.

After President Donald Trump announced last week that the U.S. intends to put 10% tariffs on another $300 billion worth of Chinese goods, China on Monday let its currency the yuan fall to its lowest level in more than a decade.

Following China's retaliation, U.S. stocks plunged Monday. The market was recovering some of the lost ground on Tuesday after China set a path for the yuan to strengthen.

"I think this is a very bad sign on both sides," Locke said. The tariffs will "impact consumers. It's going to be on clothing, electronics, toys, iPhones."

Locke said both countries need a diplomatic solution before next year. "China's still very much dependent on exports, especially to the United States. They export more to America than they do to all the EU countries combined. Twenty percent of the Chinese economy depends on exports."

Meanwhile, the tariffs are "costing American households anywhere from $800 to over $1,000 per year," Locke said. "We need to have a reset. We need a pause. We need to get people back to the negotiating table."