By Josh Zumbrun, Andrew Restuccia and Alex Leary 

WASHINGTON -- President Trump on Friday disputed China's assertion that the two countries had agreed to roll back tariffs as part of an interim trade accord, but he also said progress was being made toward resolving the long-running trade war.

"I haven't agreed to anything," Trump told reporters at the White House. "But we're getting along very well with China. They want to make a deal. Frankly, they want to make a deal a lot more than I do."

Stocks fell Friday on the president's remarks, but regained their footing later in the session. Markets soared a day earlier after the Chinese Commerce Ministry said the U.S. and China had agreed to roll back tariffs as part of the accord.

Some observers said the president's remarks may be less contradictory than they appear, noting that tariffs are the main leverage held by the U.S. and that Mr. Trump wouldn't want to commit to lifting them until the Chinese have agreed to other terms the U.S. is seeking, such as increased agricultural purchases and new rules to prevent currency manipulation.

"The heart of the problem is the U.S. wants to maintain as much tariff leverage as possible, but China wants assurances that they won't be expected to do things in the Phase 1 agreement without a step down in tariffs," said Rufus Yerxa, president of the National Foreign Trade Council. "Whether the two can reconcile that is still in doubt."

Administration officials have previously confirmed that they are negotiating over removing some of the tariffs. In a sign that those talks are progressing, both sides have been searching for a venue at which Mr. Trump and China's President Xi Jinping could meet to sign "phase one" of the agreement.

Beijing has pressed the U.S. to end all the tariffs, describing that as one of its bottom lines when talks fell apart earlier this year. Analysts have previously said China's statement that a deal on tariffs had been set may have been an effort to influence negotiations.

Mr. Trump's remarks Friday make clear that he is not considering removing all the tariffs.

"China would like to get somewhat of a rollback, not a complete rollback because they know I won't do it," Mr. Trump said.

The U.S. has imposed its tariffs in four different tranches, with different tariff rates, ultimately covering about $360 billion worth of imports from China. The latest tranche was a 15% tariff on $111 billion of goods imposed on Sept. 1. Those tariffs hit many consumer goods for the first time.

The first three tranches, which went into effect at various points in 2018, now all have a 25% tariff rate, and cover about $250 billion of goods. These tranches are focused on items like machinery and raw materials that are purchased by businesses but not directly by consumers.

The levies have been a boon for the U.S. Treasury, which collected a record $7 billion in import tariffs in September -- up more than 59% from a year earlier.

One intermediate option would be for the U.S. to dial back the consumer-focused September tariffs, but not remove any of the earlier levies.

The U.S. also has a final tranche of tariffs, covering about $156 billion of goods, largely consumer goods like electronics and toys, currently planned for Dec. 15.

Administration officials have acknowledged that any phase 1 agreement would likely have concessions from the U.S., including potentially holding off on imposing those December tariffs. One official close to the talks said the prospect of those tariffs would likely remain as leverage for future phases of the deal.

But officials cautioned that no decisions have been made and echoed Mr. Trump's assessment that a complete rollback of the tariffs is unlikely.

"I like our situation very much," the president said Friday, referring to the amount of tariff revenue that the U.S. is collecting. But he signaled he was still inclined to make a deal. "They want to make a deal much more than I do, but we can have a deal," he said.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com, Andrew Restuccia at Andrew.Restuccia@wsj.com and Alex Leary at alex.leary@wsj.com

(END) Dow Jones Newswires

November 08, 2019 12:41 ET (17:41 GMT)