White House says Trump's resolve is firm on China trade

A top White House adviser warned China on Friday not to underestimate U.S. President Donald Trump’s resolve in a brewing trade battle between the world’s two largest economies, showing little concern over Beijing’s threat to impose retaliatory tariffs on $60 billion worth of U.S. goods.

“They better not underestimate the president,” Larry Kudlow said in an interview on Fox Business Network. “He is going to stand tough.”

China on Friday said it was prepared to place additional tariffs on 5,207 goods imported from the United States, ranging from liquefied natural gas to some aircraft. The move was in reaction to a threat from Washington earlier this week to increase tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.

Kudlow, who heads the White House’s National Economic Council, said China was increasingly isolated in the trade arena, with Washington moving toward trade deals with the European Union and with Mexico.

“We are coming together with the European Union to make a deal with them, so we’ll have a united front against China and, I think, most of our trade team would tell you, we’re moving close on Mexico,” he said. “China is increasingly isolated with a weak economy.”

The United States reached a surprise deal on trade last week under which Washington agreed not to put any new tariffs on imports from the EU, forestalling a possible 25 percent levy on auto imports the Trump administration has been considering.

Kudlow told Bloomberg Television on Friday the United States and Europe were making progress in their trade talks and could announce some agreements within the next month.