President Donald Trump is not backing away from recently announced plans to raise tariffs on Chinese goods, despite indicating earlier on Sunday that he was having second thoughts, Treasury Secretary Steven Mnuchin said.
"The president is determined to have fair and reciprocal trade with China," Mnuchin said in an interview on Fox News Sunday with Chris Wallace.
"This morning's comments weren't meant to back that off. It was meant to say he is as determined as ever on this issue. He wants a good deal."Trump announced Friday that he would be raising tariffs on approximately $550 billion worth of Chinese by an additional 5 percentage points this fall. He made the announcement after China said it was retaliating for an earlier Trump tariff action by increasing duties on $75 billion worth of American goods from 5 percent to 10 percent, in waves on Sept. 1 and Dec. 1.
The escalating trade tensions between the world's two largest economies triggered a sharp sell-off in the stock market on Friday, with the Dow Jones Industrial Average down more than 600 points and the S&P 500 tumbling about 2.6 percent by the end of trading. Trump’s own tariff escalation came an hour after regular trading closed for the week.
The president confused the situation Sunday when asked by a reporter at the G7 summit in Biarritz, France, whether he was having second thoughts about ratcheting up the trade war with China.
“Yeah, sure why not. Might as well. Might as well,” Trump responded, adding that he has “second thoughts about everything.”
However, despite the prospect of a further slide in the U.
S. stock market on Monday, Mnuchin said Trump was determined to go ahead with the tariff increases he announced Friday."Absolutely," Mnuchin said in an interview from Biarritz. "And to the extent that the Chinese respond again, you can assume the president will consider all his options."
That could include using presidential authority under the International Emergency Economic Powers Act, Mnuchin added, referring to Trump's statements last week that he could use that legislation to order American companies to leave China.
Mnuchin insisted that Trump had the authority to take that step "if he declared an emergency," but said Trump has not done that yet.
"I think what he was saying is he's ordering companies to start looking because he wants to make sure, to the extent we are in an extended trade war, that companies don't have these issues and move out of China," Mnuchin said. "We want them to be in places that there [are] trading partners that respect us and trade with us fairly."
Mnuchin also said China has become an "enemy" of the United States on the trade and the financial front, even though the personal relationship between Trump and President Xi Jinping is still strong.
"I was with President Trump today and he was very clear that President XI is still his friend," Mnuchin said. "He has a very good relationship with president XI. We worked on lots of different things together, but as it relates to financial issues and trade, we have become enemies. We are not making progress."
That said, "we are still somewhat hopeful that China will come around and enter into a fair, good deal with us," he added.
Article originally published on POLITICO Magazine