White House's Kudlow says 'no cancellation' of US-China trade meeting

Larry Kudlow, the director of the National Economic Council, said in an interview on CNBC that there was "no cancellation" after media reports suggested that the United States had turned down an offer by Chinese negotiators to hold preliminary talks this week ahead of a critical meeting in Washington.

Instead, he stressed that the high-level meeting later this month was "very, very important" and "determinative."

"There were no other intermediate meetings scheduled," said Kudlow on CNBC. "The story is unchanged. We are moving towards negotiations."

Markets, which dipped initially on news that a meeting had been scrapped, bounced back after Kudlow's appearance.

A person familiar with the matter told CNN on Tuesday that the Trump administration declined an invitation from Beijing to convene a second deputy-level meeting ahead of a fresh round of trade negotiations with top officials scheduled for later this month in Washington.

Chinese Vice Premier Liu He is expected to meet with Robert Lighthizer, the US trade representative, and Treasury Secretary Steven Mnuchin on Jan. 30 and 31. The two countries are racing to agree on a deal in 90 days, a deadline set by President Donald Trump and Chinese leader Xi Jinping.

Those talks are still set to proceed, the person said.

In a statement, Lindsay Walters, a White House spokeswoman, said, "The teams remain in touch in preparation for high-level talks with Vice Premier Liu He at the end of the month."

A spokesperson for the Office of the US Trade Representative declined to comment, while a spokesperson for Treasury could not be immediately reached for comment.

Still, the US rejection of a planning meeting is a fresh signal that the US and China may have a way to go before reaching a new trade agreement.

Beijing's invitation comes weeks after a US delegation of deputy-level officials met with Chinese counterparts in Beijing for the first time since Trump and Xi agreed in Buenos Aires to restart talks.

It's remained unclear how much progress the Trump administration has made in the negotiations on structural issues like forced technology transfers and intellectual property theft.

If talks fail, Trump has threatened the US could raise tariffs on an additional $200 billion in Chinese goods.

The American President expressed some optimism over the weekend about brokering an agreement but waved off any plans to ease tariffs on the Chinese ahead of any concessions.

"We have taken in tremendous amounts of money in the United States because of the sanctions," Trump told reporters on Saturday in what appeared to be a reference to tariffs. "If we make a deal, certainly we wouldn't have sanctions."

He also touted Monday evening in a tweet that the United States has leverage over Beijing in making a deal, citing China's ailing economy.

"China posts slowest economic numbers since 1990 due to U.S. trade tensions and new policies," the President tweeted. "Makes so much sense for China to finally do a Real Deal, and stop playing around!"

On Tuesday, Secretary of State Mike Pompeo said via satellite to the World Economic Forum in Davos, Switzerland, that he was "optimistic" about upcoming talks with the Chinese but refrained from spelling out any advances.

He said there are still several difficult issues to be ironed out between the world's two largest economies, including trade imbalances and the "capacity for American businesses to operate in China without risks that their trade secrets and intellectual property will be stolen."

"I am hopeful that each of those can be dealt with constructively," said Pompeo.

In an interview on Fox Business News on Friday, Kudlow also indicated that there are many critical details that need to be addressed.

"The technology stuff has not been dealt with, the enforcement stuff has not been dealt with," Kudlow said. "The commodity stuff and the tariff rates, we're moving on the right track."

For now, American negotiators have said, the focus of discussions has been on purchases of a "substantial amount" of US agricultural products, energy, manufactured goods and other products and services by China.

They've also stressed that any trade deal with China will require "ongoing verification and effective enforcement," according to a readout from the Office of the US Trade Representative earlier this month.

CNN's Betsy Klein contributed to this report.

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