May 1, 2020 / 3:07 AM / a month ago

U.S. not considering canceling debt held by China - Trump adviser

FILE PHOTO: White House National Economic Council Director Larry Kudlow speaks during a "small business relief update" video conference call event with banking executives to discuss the U.S. government's rescue program for businesses hurt by the coronavirus pandemic, in the Roosevelt Room at the White House in Washington, U.S., April 7, 2020. REUTERS/Kevin Lamarque/File Photo

WASHINGTON (Reuters) - President Donald Trump’s top economic adviser said on Thursday the administration was not considering cancelling some debt held by China as a way to strike at Beijing for perceived shortfalls in its candidness on the coronavirus pandemic.

The Washington Post, citing two people with knowledge of internal discussions, reported on Thursday that some administration officials had discussed the idea.

“The full faith and credit of U.S. debt obligations is sacrosanct. Period. Full stop,” White House economic adviser Larry Kudlow told Reuters.

“Similarly is the reserve currency status of the U.S. dollar,” Kudlow said. “The story’s completely wrong.”

Trump told Reuters in an interview on Wednesday that he was looking at different options in terms of consequences for Beijing over the virus. “I can do a lot,” he said.

The president has shown increasing frustration with China in recent weeks over the pandemic, which has cost tens of thousands of lives in the United States alone, sparked an economic contraction and threatened Trump’s chances of re-election in November.

Reporting by Jeff Mason and Tim Ahmann; Editing by Chizu Nomiyama

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