Mnuchin 'cautiously optimistic' that US and China can reach agreement on tariffs

US Treasury secretary Steven Mnuchin said on Sunday that the US was having "very productive conversations" with China, noting that he was hopeful the White House would be able to reach an agreement with Beijing that would negate Donald Trump's need to impose tariffs on the estimated $50bn-worth of goods from the nation.

"We're having very productive conversations with them," Mnuchin told Fox News Sunday, when discussing the talks.

"I'm cautiously hopeful we reach an agreement."

At the president's behest, Mnuchin proposed new investment restrictions on Chinese companies on Thursday as part of his efforts to safeguard technologies that America viewed as being strategic, saying that he wanted to see the US's trade deficit with China decrease by $100bn.

A day later, Beijing reacted by announcing its plans to slap tariffs of $3bn on US imports in response to the steel and aluminium duties ordered by Trump earlier in March.

Washington then declared a temporary exemption for the European Union and other nations on those levies, making the focus on China clear even as fears began to circulate that Beijing was looking into further US imports that could potentially be hit with tariffs, like aeroplanes, computer chips and the tourism industry.

Mnuchin was adamant that both countries were set on reducing the deficit and were trying 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."

"We're not afraid of a trade war, but that's not our objective," he said.

"In a negotiation, you have to be prepared to take action."