Treasury Secretary Steve Mnuchin on trade war with China: "It could be, but I don't expect it at all"

Treasury Secretary Steve Mnuchin says he doesn't expect a trade war with China over new tariffs on Chinese imports but didn't rule out the possibility that the current dispute could escalate further. President Trump on Thursday said he would consider adding another $100 billion worth of products to the list of Chinese imports potentially subject to tariffs, just two days after the U.S. released a list of 1,300 products it proposed hitting with tariffs, totaling about $50 billion in trade. 

"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. We're just looking for our companies and our workers to have a level playing field and right now we have about $500 billion of goods that we buy from China and they buy about $135 billion from us.

Mnuchin's latest comments come after he told CNBC on Friday that he was "cautiously optimistic" that the U.S. and China could reach an agreement before any tariffs are implemented but added, "There is the potential of a trade war." 

He told "Face the Nation" on Sunday, "I don't expect there will be a trade war. It could be, but I don't expect it at all."

In response to Mr. Trump's tariffs, China wasted no time punching back with $50 billion in tariffs of its own on 106 products it imports from the U.S. 

But the secretary was adamant that despite China and the U.S. exchanging new rounds of tariffs, both Mr. Trump and Chinese President Xi Jinping have a common goal of reducing the trade deficit, pointing to the president's tweet on Sunday that the two leaders "will always be friends no matter what happens" with trade disputes.

"The president is willing to make sure we have free and fair trade as you've seen his tweet already this morning and, again, he has a very close relationship with President Xi and we'll continue to discuss these issues with them," Mnuchin said. 

Mnuchin added, "What I will emphasize is that this is really our objective is free and fair trade. We've been talking about this for the last year with them. It's actually just about a year anniversary since the president's meeting at Mar-a-Lago and I think the good news is President Xi and President Trump have shared with the economic teams. We have a common objective to make sure we reduce the trade deficit. But President Trump is prepared to defend US interests."

  • Emily Tillett

    Emily Tillett is a politics reporter and video editor for CBS News Digital