Focusing on more long-term economic goals than this week's near-term stock-market declines, Treasury Secretary Steven Mnuchin predicts the China tariffs and talk of a trade war will merely get the United States to "fair and free reciprocal trade" the administration has sought all along.
"I think the most important thing to focus on is the market will go up and down in the short term," Mnuchin told "Fox News Sunday." "The real important issue is where will it be longer term. The market is still up an enormous amount since the election, and we're confident as we continue in our economic plans that will translate into the market doing better."
Mnunchin told host Chris Wallace the tariffs plan presented on China is merely the third prong of a three-part economic plan by President Donald Trump's administration.
"As it relates to the tariffs, there's really been three parts of our economic plan, and we've been very consistent from day one: Tax reform, regulatory relief, and trade," Mnuchin told Wallace. "Now we are executing on the third part of our plan. I don't think anybody should be surprised. This is a president that absolutely believes in free trade, but wants free and fair trade. Has been very clear since our first meeting with President XI that the trade deficit has to be addressed, that they need to open up their markets to our companies, and that's fair and free reciprocal trade."
As much as there might be some short-term declines, Mnunchin said, the pain is necessary to get what the U.S. needs to make a better trade deal with many countries, namely China.
"I don't expect to see a big impact on the economy," Mnuchin said of the tariffs. "We've been very careful in how we are doing this and what we're doing. But again, I think what we're doing is long term very good for the economy, which was pressing for free and fair trade, and to the extent that China is willing to open up their markets, which they are making all the right directions on. But, if they open up their markets, it's an enormous opportunity for U.S. companies."
The threat of a trade war is more of a negotiating starting point, than the end goal, Mnuchin told Wallace.
"As President Trump said, we're not afraid of the trade war, but that's not our objective," Mnuchin said.
". . . I think we are working on a pathway to see if we can reach an agreement as to what fair trade is for them to open up their markets, reduce their tariffs, stop forced technology transfer. These are all the things we want to do. In a negotiation you have to be prepared to take action and that's what President Trump is doing."
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