President TrumpDonald TrumpPredictions of disaster for Democrats aren't guarantees of midterm failure A review of President Biden's first year on border policy Hannity after Jan. 6 texted McEnany 'no more stolen election talk' in five-point plan for Trump MORE’s top economic adviser on Friday shot down reports that the administration was assembling a proposal for a trade deal with China amid rising tensions between Washington and Beijing.
Bloomberg News reported early Friday morning that Trump had ordered Cabinet officials to throw together a potential trade deal with China ahead of his meeting with Chinese President Xi Jinping at the Group of 20 summit later this month.
"We're doing a normal, routine run-through of things that we've already put together and normal preparation," Kudlow said. "We're not on the cusp of a deal."
Trump and Xi are expected to discuss trade among other crucial issues at the G-20 summit later this month and spoke over the phone Thursday. Trump said his call with Xi was "long and very good" with a “heavy emphasis on trade,” but Kudlow stressed that the U.S. and China are still far apart in formal talks.
"There's no massive movement to deal with China," Kudlow told CNBC's "Halftime Report." "We have already put out asks to China with respect to trade."
Stocks began to slide shortly after Kudlow tamped down Wall Street’s hopes of an imminent end to the U.S.-China trade war.
The Dow Jones Industrial Average sunk 300 points soon after Kudlow’s comments, erasing a morning gain of almost 200 points. The S&P 500 fell 1.3 percent and the tech-heavy Nasdaq composite dropped 1.7 percent, due in part to a broad sell-off in tech stocks led by Apple.
The expanding trade war between the US and China has chilled stock action in October as weary traders fear the long-term impact of tariffs between the world's two largest economies. The three major U.S. stock indexes have shed their 2018 gains and face headwinds from slowing global growth and rising interest rates.
Trump has imposed tariffs on $250 billion in Chinese goods and has threatened to tax the entirety of the country’s U.S. exports, which are worth roughly $500 billion. China has responded with tariffs on $110 billion in U.S. goods and could expand its retaliation to stricter investment restrictions for American firms.
Trump is seeking to narrow the U.S. trade deficit with China and halt Chinese intellectual property theft from American firms. The Justice Department on Thursday announced new charges against a Chinese state-owned company, a Taiwanese company and three Taiwanese nationals for engaging in economic espionage on behalf of the Chinese government.