White House economic adviser Larry Kudlow told CNBC that while US President Donald Trump plans to meet Chinese President Xi Jinping later this month, he has not asked US officials to draw up a proposed trade plan, contradicting a report earlier in the day that had buoyed hopes of a resolution.
Before leaving the White House for a campaign event, US President added: "I think we'll make a deal with China, and I think it will be a very fair deal for everybody, but it will be a good deal for the United States".
Trump has since threatened to impose further $371 billion tariffs on Chinese imports - a move that would cover virtually everything China ships to the United States. "We are having very good discussions with China".
"We're doing a normal, routine run-through of things that we've already put together and normal preparation", he said.
The Chinese president was also quoted as saying that he was willing to meet Trump in Argentina during the G-20 summit. Washington, Europe and other trading partners say those violate China's market-opening obligations and some American officials worry they might erode US industrial leadership.
Trump said a deal with China would also be good for Beijing.
"We're optimistic this is a potential off-ramp of increasingly antagonistic trade tensions and hope it leads to a pause and new negotiations", he said.
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China's foreign ministry on Friday said the call, which took place on Thursday, had been "extremely positive" and that the two leaders think they should enhance economic relations. -China Business Council in Beijing, said there were plenty of challenges that would require significant negotiations in advance of a meeting between Trump and Xi to ensure success.
"He wants to do it", Trump said of Xi.
The president's remarks helped USA stocks to trim their losses on a day that started with market optimism over a Bloomberg report quoting unnamed sources as saying that Trump had ordered his cabinet to draw up terms for a China trade deal.
"We are not on the cusp of a deal", Kudlow said.
The Trump administration also has taken action to hit the Chinese semiconductor industry, indicting two companies accused of stealing trade secrets and banning us software and equipment exports to one of them.
"There is a long way to go" on negotiations, the United States official said, according to the tweet. "If the policy talks don't, it may deteriorate", Kudlow said.