Larry Kudlow, director of the National Economic Council, dampened expectations about any major breakthroughs coming from U.S.-China trade negotiations next week.
“I wouldn’t expect any grand deal,” Kudlow told CNBC’s “Squawk on the Street ” on Friday. “Talking to our negotiators, I think they’re going to reset the stage and hopefully go back to where the talks left off last May.”
U.S. stocks pared gains after Kudlow’s comment. The Dow Jones Industrial Average traded just above the flatline around 10:30 a.m. ET.
A U.S. trade delegation is scheduled to fly to China on Monday for negotiations with Chinese officials. This will be the first round of trade talks since President Donald Trump and Chinese President Xi Jinping agreed at the G-20 summit last month to restart negotiations.
Talks broke down in May after the U.S. hiked tariffs on billions of dollars worth of Chinese imports. China retaliated with levies of its own. Kudlow noted that 90% of a deal had been worked out before the breakdown.
“We were doing well then,” Kudlow said. He added that the two sides still need to address key structural issues such as intellectual property theft and forced transfers of technology.
Kudlow also cheered the strength of the U.S.economy after the release of stronger-than-forecast growth data. The U.S. economy grew by 2.1% in the second quarter, topping expectations, the Commerce Department said.
He called the consumer the “hero” of the U.S. economy, noting consumers had “explosive economic growth.” Kudlow also said it is “almost a miracle” that the economy continues to grow at this pace despite the Federal Reserve hiking rates in 2018.
