New White House chief economic adviser Larry Kudlow appeared on “Fox News Sunday” yesterday, and said that the Trump administration is planning on rescinding some of the $1.3 trillion omnibus bill passed by Congress. Despite its size, the omnibus didn’t even include a key promise of Trump’s campaign: funding of the border wall with Mexico. It merely included enough for a “down payment” on the border.

Trump initially threatened to veto the omnibus, then reluctantly signed it. He’s since demanded that Congress give him line-item veto ability so he can gut any future extravagant omnibus bills. While that would certainly solve the problem, it’s extremely unlikely that Trump will be granted this power.

Meanwhile, Kudlow said that “I think the Republican Party on the Hill has finally figured out it’s really not a bad idea to trim some spending because after all, spending can lead to deficits, and spending interferes with the economy, and President Trump is a deregulator and a tax cutter. We want a much more modest government role.”

Kudlow also addressed escalating trade tensions with China. “Now, you’re a market guy. The markets dropped 572 points on Friday. Clearly, there are a lot of serious investors who think there’s a real chance of a trade war,” host Chris Wallace said to Kudlow.

Kudlow replied, “So far, no tariffs and no action has been enacted [by China]. Point number two. I believe China’s response to the U.S. actions, which is a complaint against stealing intellectual property against forced technology transfers, I think that’s a legitimate complaint, so does the rest of the world.”

Regarding China’s threats of retaliation, Kudlow said that “China’s response was highly unsatisfactory and I think that’s unfortunate. We do have constant communication with them, to be sure. I hope their side picks up on this. But so far, stonewalling us is not the answer.”

What do you think? Will China retaliate soon with tariffs of their own? Let us know your thoughts in the comments section below.

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