Treasury Secretary Steve Mnuchin does not think the U.S. is entering a trade war with China but warned President Donald Trump is willing to do what is necessary to achieve what he believes are more “free and fair” trade practices between the two nations, he said Sunday.
“I said, ‘our expectation is that we don’t think there will be a trade war. Our objective is to continue to have discussions with China. We want to have free and fair, reciprocal trade,'” Mnuchin said on CBS’s “Face The Nation” Sunday. “We are just looking for our companies and our workers to have a level playing field.”
Trump’s administration rolled out its long-promised tariffs on Chinese goods early this week, claiming they were necessary to combat technology theft detrimental to America’s economy.
The Office of the U.S. Trade Representative (USTR) released a list April 3 of roughly 1,300 Chinese goods, worth approximately $50 billion, subject to tariffs of around 25 percent.
“The total value of imports subject to the tariff increase is commensurate with an economic analysis of the harm caused by China’s unreasonable technology transfer policies to the U.S. economy,” the USTR wrote Tuesday.
China is responding to the president’s move in kind, issuing a list of 106 U.S. imports it plans to slap with a 25 percent tariff Wednesday. The counter action caused some to question the president and raise concerns the administration is starting a “trade war.”
The nation is in a unique position to force China into engaging in what the administration believes would be free and fair trade, Mnuchin said. The U.S. purchases roughly $500 billion in Chinese goods and services each year, while the Chinese purchase around $130 billion a year in American goods, the treasury secretary pointed out.
Mnuchin does not believe there will be a trade war but said the president is willing to do whatever is necessary to ensure everyone is engaging in free and fair trade, he reiterated.
“So this is one of the single biggest opportunities for American companies and American workers if we have free and fair trade. That is what the president wants, so I don’t expect there will be a trade war. There could be. I don’t expect it at all, but the president is willing to make sure we have free and fair trade,” Mnuchin said.
The treasury secretary’s comments Sunday are in stark contrast to what he told CNBC Friday, claiming there is a very real “potential of a trade war.”
Trump believes he has a great relationship with Chinese President Xi and he thinks China will ultimately decide to engage in trade practices more amicable to the president’s agenda, the president tweeted before Mnuchin’s ABC appearance Sunday.
President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!
— Donald J. Trump (@realDonaldTrump) April 8, 2018
Trump threatened China April 6 with an additional $100 billion tariffs, causing the Chinese government to once again flex its muscle.
“If the U.S. side announces the list of products for $100 billion in tariffs,” Chinese Ministry of Commerce spokesman Gao Feng said Friday, “the Chinese side has fully prepared and will without hesitation counterattack with great strength.”
U.S. exports to China totaled $115.6 billion in 2016, down 0.3 percent from 2015. Agriculture products (soybeans, grains, fruits and seeds), aircraft, electrical machinery and vehicles are some of the top U.S. exports to China, according to USTR.
Chinese imports accounted for over 21 percent of all U.S. imports in 2016, totaling $426.6 billion. The U.S. goods trade deficit with China was $347 billion in 2016 — a decrease of $20.2 billion since 2015. The U.S. had a services trade surplus of $38 billion in 2016, up 13.6 percent from 2015.
Markets reacted to the administration’s protectionist trade rollout with uncertainty. The Dow Jones Industrial Average fell 550 points at the closing bell Friday. The S&P 500 had its 9th one percent fluctuation in the last 11 trading days — a sign of underlying uncertainty and investor anxiety as two of the world’s power players face off in the ongoing trade negotiations.
NOW WATCH: Sec. Steve Mnuchin Say We Aren’t Going Into A Trade War With China:
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