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President Donald Trump said that the U.S. hasn’t agreed to roll back all tariffs on China, muddying hopes raised by China and even some of the president’s own aides that the U.S. was ready to lift some tariffs to secure a trade deal.

“They’d like to have a rollback, I haven’t agreed to anything,” Trump told reporters last week. “China would like to get somewhat of a rollback—not a complete rollback, because they know I won’t do it.”

On Nov. 7, signs were pointing toward a first-phase deal that would include a tariff rollback. China’s Ministry of Commerce spokesman Gao Feng said negotiators had discussions and “agreed to remove the additional tariffs in phases as progress is made on the agreement.”

White House economic adviser Larry Kudlow also said Thursday that “if there’s a phase one trade deal, there are going to be tariff agreements and concessions.”

Trump made clear late last week that the U.S. hasn’t yet reached an agreement and emphasized that he wouldn’t eliminate all tariffs. There is an expectation that tariffs scheduled for Dec. 15, which would hit popular consumer items like smartphones and toys, won’t take effect as part of an initial deal. But a lot of tariffs remain in place including a 15 percent tariff on an additional $110 billion in goods that took effect Sept. 1.

Trump in his comments revived questions about the location for signing any deal with his Chinese counterpart Xi Jinping. The leaders had initially expected to meet at an international summit in Chile this month, but it was canceled.

“Assuming we get it, I don’t like to talk about things until they happen, but it could be Iowa or farm country or some place like that,” the president said Friday. “It will be in our country, but it could be some place like that.”

If the two sides do not strike a deal, it likely would lead to a further escalation in the trade wars.

Source: Bloomberg, Purdue