Treasury Secretary Steven Mnuchin acknowledged Friday that President Trump’s threatened tariffs on Chinese imports could kick off a full-scale trade war, but he implied that the administration is in talks with China about resolving the standoff.
“There is the potential of a trade war,” Mnuchin said in an interview with CNBC Friday afternoon.
“There is a level of risk that we could get into a trade war,” he repeated.
The two countries have traded escalating threats of tariffs this week, with Trump calling Thursday evening for his trade representative to explore tariffs on an additional $100 billion of Chinese imports on top of the $50 billion he already proposed.
The objective isn’t a trade war, Mnuchin said, but rather free and fair trade, and Trump is prepared to defend U.S. interests.
Asked directly if there are ongoing negotiations with China’s government about reaching an agreement to defuse the situation, Mnuchin hedged, saying he didn’t want to negotiate in public.
“We are willing to negotiate; we are in communication with them regularly,” he said.
For his part, Trump has welcomed the prospect of a trade war, musing on Twitter that it would be easy to win.
Meanwhile, his top economic adviser, Larry Kudlow, downplayed the threats of tariffs earlier Friday, suggesting that there was plenty of time to negotiate and avoid retributive taxes.
“This has been very well organized,” Mnuchin said. “Our strategy is very clear.”
