US Treasury Secretary Says Trade War With China Could Happen, As Markets Jitter

US Secretary of Treasury Steven Mnuchin on Friday did not rule out the possibility of trade war with China amid tit-for-tat threats, as markets reacted nervously to the possibility of such an eventuality that would impact the global economy across the board.

WASHINGTON, April 7 (UrduPoint / Pakistan Point News - 7th Apr, 2018 ) :US Secretary of Treasury Steven Mnuchin on Friday did not rule out the possibility of trade war with China amid tit-for-tat threats, as markets reacted nervously to the possibility of such an eventuality that would impact the global economy across the board.

In an interview with CNBC news, Mnuchin said that US was not in trade war with China, but added that it may happen soon. "There is the potential of a trade war, on the one hand, we are willing to continue negotiations.

And on the other hand, the president is absolutely prepared to defend our interests," he was quoted as telling CNBC. His comments came amid the growing fear of a trade war between the world's two biggest economies after President Trump unveiled plans last month to impose $50 billion of import tariffs on Chinese goods.

In retaliation, Chinese last week outlined its own plans to hit American goods with $50 billion in tariffs that included dozens of agriculture products. As the markets watched the development, a White House statement issued on Thursday added further fuel to the fears of trade war, saying that President Trump has instructed trade officials to consider an additional $100 billion in taxes on Chinese imports.

A Chinese response to the new threats from Trump made it clear that the two countries could enter a protracted trade war. A Chinese spokesman was quoted as saying by the media that China was well prepared and would fight back with force and without hesitation if the US took the extreme steps.

Both countries have not yet implemented the taxation measures that have already rattled the world's stock markets. US markets closed down on Thursday. US Treasury Secretary Mnuchin said that the two countries were in communication on the trade issues but did not offer any details.

He though stated that two countries were working toward a compromise on the trade standoff. President Trump seemed adamant to push his plans by saying that he was not saying that it would hurt people, but added, "We may take a hit, and you know, ultimately we are going to be much stronger under his presidency".

The prospects of trade war between the world's top two economic powers came weeks after President Trump annoyed many of the American allies by imposing tariffs on steel and aluminum, which said they would retaliate if hurt.