President Donald Trump’s chief economic adviser said Friday that the administration would move to reimpose tariffs on China following the adoption of a “phase one” trade agreement if Beijing failed to live up its agreement.
White House Economic Adviser Larry Kudlow told CNBC the tariffs would come if there are any disputes.
“If it’s not resolvable, some economic valuation will be ascribed and actions will be taken. No question, there could be tariff actions taken as an enforcement tool,” Kudlow said.
“We will see how it works. We will see if the Chinese stay with their word,” he added.
Under terms of the agreement, the U.S. will reduce some tariffs in exchange for increased Chinese purchases of American agricultural products like soybeans and other goods.
Beijing has said it would guy $32 billion in additional agricultural products over the next two years, according to U.S. officials familiar with the agreement.
That is up from a baseline of $24 billion worth of farm goods purchased in 2017 before the trade war began.
Also, China pledged to increase purchases of U.S.-made goods, energy, and services.
In exchange, the Trump administration agreed to freeze tariffs that were set to go into effect on Sunday while reducing others, officials noted.
Both sides are expected to sign a formal deal the first week of January in Washington, D.C.
U.S. President Donald Trump tweeted Friday morning, “We have agreed to a very large Phase One Deal with China.”
Officials in China have “agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more,” he added.
Kudlow did say, however, that discussions regarding forced technology transfers — a major sticking point of the trade war since it began — may not be over along with talks about intellectual property protections.
“Regarding intellectual property rights, there’s a section in that chapter that would prevent the kind of counterfeiting among tradable goods that has been going on for years. that is clearly an unfair trading practice,” Kudlow said.
“There’s a section, also in the IP area, that says plainly that if an American company is going for a license to do business that any forced technology transfers will not be used by the Chinese,” he added.
“We will test those propositions,” he said, adding the U.S. expects China to make these changes “in good faith.”