China’s economy is collapsing while the United States is very strong, so Washington is holding the upper hand in trade negotiations with Beijing.

President Donald Trump’s economic adviser Larry Kudlow made those comments on CNBC on Tuesday, Aug. 6, in which he said the Trump administration still wants to negotiate and is planning to host a Chinese delegation next month despite recent escalating trade tensions.

“The Chinese economy is crumbling,” he said. “It’s just not the powerhouse it was 20 years ago.”

Kudlow—director of the White House National Economic Council—said, “Any long chart of Chinese investment” or economic metrics shows “a steady downdraft.”

China reported its economic growth slowed to 6.2 percent in the second quarter of 2019, the weakest it’s been in at least 27 years.

But Kudlow said China’s GDP number is probably inflated by several points, and it is “coming in lower and lower.”

The senior economist said China may hold out on a trade deal, but it will get hurt significantly.

“The American economy is very strong, theirs is not,” Kudlow said, suggesting the United States can withstand any slowdown better than China following a trade war between the two largest economies.

The trade tensions escalated last week after President Trump, on Aug. 1 announced new tariffs on Chinese goods from September. Right after China’s central bank devalued the yuan on Aug. 5 as a retaliatory measure, the Trump administration just declared China as a currency manipulator.

Though China on Tuesday warned the United States’s accusation would undermine international order, President Trump downplayed fears of a protracted trade war.

“Massive amounts of money from China and other parts of the world is pouring into the United States for reasons of safety, investment, and interest rates! We are in a very strong position. Companies are also coming to the U.S. in big numbers. A beautiful thing to watch!” President Trump tweeted on Tuesday.

“As they have learned in the last two years, our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do – And I’ll do it again next year if necessary!” he wrote.

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