Mnuchin and Kudlow: Trade War Not Happening

Susan Jones | April 9, 2018 | 7:19am EDT
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(Photo: Screen grab/C-SPAN)

( – Members of the Trump administration are playing down talk of a trade war with China.

“We don't think there will be a trade war. Our objective is to continue to have discussions with China,” Treasury Secretary Steve Mnuchin told CBS’s “Face the Nation” on Sunday.

And Larry Kudlow, President Trump’s newly appointed chief economic adviser, told “Fox News Sunday, “We're not going to end up in a trade war.”

“Look, we haven't even enacted anything yet,” Kudlow said, speaking about President Trump’s threatened tariffs on Chinese goods. “So, let's go easy on the trade war. We got several months here,” Kudlow added.

Mnuchin told CBS:

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.

So, this is one of the single biggest opportunities for American companies and American workers if we have free and fair trade. And that's what the president wants.

So, I don't expect there will be a trade war. It could be, but I don't expect it at all. And, again, he has very close relationship with (Chinese) President Xi, and we will continue to discuss these issues with them.

Mnuchin refused to discuss the administration’s “back-channel discussions” with China on trade issues. “I don't want to comment on specific discussions and where they stand,” Mnuchin said.


“What I will emphasize is that this is really -- our objective is free and fair trade. We have 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 U.S. interests.”

Mnuchin said he doesn’t expect the trade issue to have a “meaningful impact” on the U.S. economy:

“But again, let me just put this in perspective. It's only $135 billion of goods in a $20 trillion economy. And if we can open up their $10 trillion economy for us to compete fairly, this is one of the single biggest opportunities long term for U.S. companies.”

Over on “Fox News Sunday,” Larry Kudlow acknowledged that the stock market is nervous about all the trade war talk:

“I mean, I know there are some jitters out there. I don't think there's any trade war in sight. Just technically, we have taken no actions, you understand that. And even the Thursday announcement for President Trump, he asked Ambassador Lighthizer to consider additional actions," Kudlow said.

"It's a long process. Several months here. We put our papers, we take public comments. We then review the public comments and then decisions will be made. So far, no tariffs and no action has been enacted.”

Kudlow said the president is not bluffing about tariffs, and he noted that “there are a number of tools at his disposal."

“Just one thing there,” Kudlow added:

People are saying Trump, Trump, Trump. This is a problem caused by China, not a problem caused by President Trump, and I would go so far as to say, Trump is there to fix the problem.

If you talk to the president as I have, he regards himself as a free trader, all right? As do I. But his argument, and it's a good one, you can't have free trade, which is pro-growth around the world unless China brings down its barriers, opens up its markets and stop this technology steal that they're doing.

Now, with respect to China, I've always been a hard-liner on China, and while I don't like tariffs, sometimes there is no substitution for putting tariffs into the discussion, into the process. That is part of the quiver of arrows that the president has.

Look, he's a great negotiator. He has a whole history of that. But in this process, tariffs have to be part of it. There's no two ways about it. Then, hopefully, there will be discussions and hopefully, in just the next two months, the Chinese will come seriously back to the table.

President Trump’s first tweet of this Monday morning involved “stupid trade” with China:

“When a car is sent to the United States from China, there is a Tariff to be paid of 2 1/2%. When a car is sent to China from the United States, there is a Tariff to be paid of 25%. Does that sound like free or fair trade. No, it sounds like STUPID TRADE - going on for years!” the president wrote.

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