The Trump administration’s top economic adviser pushed back on speculation that the president is ready to soften his stance on China, saying that the US is operating from a position of “economic strength.”

“The USA is growing rapidly. The tax cuts, the deregulation rollback, the trade reform … we are growing. The Atlanta Federal Reserve is suggesting we may get near 5% growth in the second quarter,” Larry Kudlow, the director of the National Economic Council, said in a televised interview on Wednesday.

“That gives us the strength. China’s economy is not doing well. They are slowing down by many, many measures. Half of that economy is state-run enterprises that are losing money daily. Half of that economy is being financed by state-run banks who are issuing a couple of trillion dollars of non-performing loans. That’s a business and economic model which is not durable,” said Kudlow, who is seen as one of the trade doves in the White House and has advocated for a softer approach on trade.

“I believe China is operating from a greater position of weakness than folks think, and we are operating from a greater position of economic strength.”

The comments come ahead of a deadline of July 6 for a first round of tariffs on US$35 billion worth of intellectual-property-intensive Chinese goods to take effect. President Donald Trump has threatened that tariffs on a total of $250 billion in Chinese goods are on the table, should Beijing refuse to offer more than what it already has, which amounts to long-term contracts for US energy and agricultural goods.

The Trump administration has indicated that non-tariff barriers to investment in China, including pressure to transfer technology to local Chinese partners, along with industrial policies that grant subsidies to high-tech industries, are obstacles that need to be addressed.