(Bloomberg) -- President Donald Trump’s top economic adviser said the U.S. and China are holding “back-channel discussions” to resolve an escalating trade dispute that has unsettled global financial markets.
“There are all kinds of back-channel discussions going on,” Larry Kudlow, director of the National Economic Council, told reporters at the White House on Friday. He insisted that the U.S. and China are not in a trade war.
Trump added to the tensions over trade on Thursday when he instructed the U.S. Trade Representative’s Office to consider tariffs on an additional $100 billion in Chinese imports, bringing to $150 billion the range of Chinese products under consideration. China has said it will respond proportionately, and has so far proposed duties on $50 billion in U.S. products, including aircraft and soybeans.
The S&P 500 Index erased its weekly gain on Friday following Trump’s move; Treasuries rose.
Treasury Secretary Steven Mnuchin told CNBC on Friday that “there is a level of risk that we could get into a trade war,” but added that he’s “cautiously optimistic” that the world’s two largest economies would resolve differences through negotiations.
Kudlow said the U.S. hasn’t given China a list of demands, but the administration has said that technology and intellectual property theft are central issues.
“The American economy is driven by technology and technological advances. That’s our future. We can’t let them steal our work in this area,” Kudlow said.
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