President Trump says the U.S. and China are close to striking a mini trade agreement. But he offered no guarantees.
In a speech to the Economic Club of New York on Tuesday, Trump downplayed the cost of his trade war, which has hurt farm exports and contributed to a slowdown in the U.S. manufacturing sector.
"The real cost would be if we did nothing," he said.
Trump offered few clues about the status of trade talks except to say, "We're close."
"A significant phase-one deal with China could happen — could happen soon," he said. "But we will only accept a deal if it's good for the United States and our workers and our great companies."
Stocks rallied last week after China's Commerce Ministry announced that the U.S. had agreed to roll back some tariffs as part of a mini trade deal. Trump welcomed the stock market gain but denied that any such agreement had been struck.
The president used his New York address to boast of an economic turnaround since he took office, although statistics paint a more nuanced picture.
While unemployment has fallen to a near half-century low, job growth has slowed on Trump's watch, with 6.3 million jobs added during the last 33 months, compared with 7.4 million jobs during the last 33 months under President Obama.
GDP growth accelerated after the passage of the GOP tax cut in 2017 but has since fallen, with an annual growth rate below 2% in the most recent quarter. And manufacturing activity has declined for the last three months.
Fallout from the trade war may have cost Republicans up to five House seats in the midterm elections. New research suggests that while GOP candidates lost support in parts of the country hurt by retaliatory tariffs, there was no offsetting pickup in areas where Trump's tariffs gave a boost to local industries.
"It was all pain and no gain," said Emily Blanchard, an economist at Dartmouth College's Tuck School of Business. "And we were sort of surprised by this."
Blanchard and her fellow researchers found that the hit to Republicans was strongest in the most competitive districts, where opposition to the trade war rivaled health care as a politically powerful issue.
"If you're in a close district, this is a little note to wake up and smell the coffee and maybe be worried about some of these pocketbook issues," Blanchard said.
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