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Trump officials feud on sidelines of trade talk, source says
01:40 - Source: CNN
Washington CNN  — 

President Donald Trump on Tuesday tempered expectations set by his own administration that the US and China had reached a tentative agreement to resolve a bubbling trade dispute between the two countries.

“There is no deal,” Trump said flatly on Tuesday, seemingly rejecting comments by his own top economic officials who suggested the US and China were on the cusp of an agreement to reduce the US’ trade deficit with China.

“We’ll see what happens, but that deal I will say could be much different from the deal that finally emerges and it may be a much better deal for the United States,” Trump added.

Trump’s comments came two days after Treasury Secretary Steve Mnuchin said the US and China had agreed to a “framework” for a trade deal and were “putting the trade war on hold.” Stock markets rallied the next day amid a sense that the US-China trade tensions were cooling, but Mnuchin’s comments also prompted a backlash from Trump supporters and economists who argued Trump was easing the pressure on China without having achieved significant concessions.

Trump rejected the suggestion that he was softening his stance on Chinese trade abuses, insisting he would negotiate a deal that would benefit the US and noting that it was his administration that barred the Chinese firm ZTE from doing business with US firms last month.

Trump appeared to suggest that Mnuchin had gotten ahead of the administration’s position, rebuking coverage of the latest US-China trade developments as “incorrectly written,” even though he said reporters were not to blame.

“I’m not saying that’s the reporters’ fault, I’m saying I’m not talking about the trade deal. I don’t like to talk about deals until they’re done,” Trump said.

His comments came amid bitter disagreements among the President’s trade team over the direction the US-China trade talks have taken under Mnuchin’s leadership. The disagreements burst into public view on Sunday when Mnuchin’s comments about putting tariffs “on hold” were followed up by a statement from Robert Lighthizer, the US Trade Representative, who said the US “may use all of its legal tools to protect our technology through tariffs” and other means.

A source close to the process said the statement was intentionally contradictory and an effort by Lighthizer to keep Mnuchin from getting ahead of the administration’s negotiations.

The source argued that Mnuchin was “freelancing” with his comments on Sunday and said Mnuchin was in danger of becoming “Rex Tillerson 2.0,” referring to the former secretary of state whom the President rebuked for getting ahead of his positions. A Mnuchin spokesman did not immediately respond to a request for comment.

Trump’s comments on trade on Tuesday during an Oval Office meeting with the South Korean President also reflected the extent to which trade negotiations with China loom large amid preparations for the North Korean summit. At one point, the President abruptly transitioned from discussing US-China trade issues to airing his concerns about Chinese influence over North Korea.

And he made explicitly clear that the situation with North Korea is also on his mind as he deals with China on trade issues.

“We have a very powerful hand on trade. And when I’m thinking about trade – you know, I read you folks and you say, ‘Well, why does he’ – there’s a much bigger picture that I have in mind,” Trump said. “When I think of trade with China, I’m also thinking about what they’re doing to help us with peace with North Korea. That’s a very important element.”

Trump suggested North Korea’s harsher tone in a series of statements last week was a result of Kim Jong Un’s most recent meeting earlier this month with Chinese President Xi Jinping

“When Kim Jong Un had the meeting with President Xi in China … I think there was a little change in attitude from Kim Jong Un,” Trump said in the Oval Office. “So I don’t like that. I don’t like that from the standpoint of China.”

Even as he insisted he enjoyed a “great relationship with President Xi,” and recalled “two of the great days of my life” spent in Beijing last November, Trump cast doubts on Xi’s intentions.

“I think that President Xi is a world class poker player,” he said. “There was a somewhat different attitude (from North Korea) after that meeting and I’m a little surprised.”

CNN’s Kevin Liptak contributed to this report.