By Josh Zumbrun and Harriet Torry 

President Donald Trump said the U.S. and China are close to completing "phase one" of their trade deal, but indicated both sides were still hammering out terms.

"They are dying to make a deal," Mr. Trump said of Chinese officials in a speech to the Economic Club of New York on Tuesday. "We are the ones deciding whether or not we want to make a deal. We're close."

The U.S. and China were also close to a deal this spring before hitting an impasse, Mr. Trump reminded his audience. Despite his optimistic outlook, Mr. Trump said another breakdown would lead the U.S. to ramp up tariffs already imposed on Chinese imports.

"If we don't make a deal we're going to substantially raise those tariffs, they're going to be raised very substantially," he said.

The Chinese embassy didn't immediately respond to a request for comment.

The U.S. has imposed 25% tariffs on $250 billion of imports from China, as well as 15% tariffs on a separate tranche of $111 billion of goods. Washington has also threatened to impose tariffs for a final tranche of about $156 billion of goods starting Dec. 15.

China wants the U.S. to remove all tariffs, a demand that is being negotiated at the bargaining table, the Journal has previously reported. People following the talks say it is likely the U.S. will agree to reduce or eliminate some tariffs in return for Beijing's promise to buy more U.S. farm goods, enact reforms to protect intellectual property and prevent currency manipulation.

Possible scenarios include dropping plans to impose the Dec. 15 tariffs altogether and rolling back 15% tariffs on about $111 billion in Chinese imports imposed Sept. 1.

Mr. Trump is also weighing whether to impose tariffs on European and Asian auto imports by Wednesday.

Mr. Trump didn't comment on his plans for the car tariffs but he said his approach--particularly the threats of tariffs--had been successful at bringing Mexico, Canada, Japan and South Korea to the negotiating table.

By contrast, he said that the European Union had been "very very difficult. The barriers they have up are terrible. In many ways worse than China."

Mr. Trump made the remarks on trade in a broader address to the Economic Club, in which he touted the growing economy and strong labor market as he confronts possible impeachment by the House and a re-election fight next year.

"Our country is strong, our country is great, our economy is probably the best it's ever been and we want to keep it that way," Mr. Trump said.

The unemployment rate ticked up from a 50-year low to 3.6% in October as hundreds of thousands of Americans joined the labor force, and wage growth remained steady, up 3% from a year earlier. Still, economic growth has cooled this year. Gross domestic product grew at a 1.9% annual rate in the third quarter, slowing from 2% in the second quarter and a 3.1% pace in the first.

Mr. Trump repeated his criticism of the Federal Reserve Tuesday, saying that higher short-term interest rates in the U.S. compared with other major economies "puts us at a competitive disadvantage to other countries."

The Fed began raising rates from near zero in late 2015, peaking at a range between 2.25% to 2.5% in December last year, "which were in my opinion, far too fast an increase, and far too slow a decrease," he said. The central bank has since cut rates three times, to a 1.5% to 1.75% range.

Alex Leary contributed to this article.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com and Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

November 12, 2019 16:05 ET (21:05 GMT)

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