Treasury Secretary Mnuchin Says Trump May Consider 'Decoupling' With China

In an interview with Fox News on Monday, U.S. Treasury Secretary Steven Mnuchin suggested that the Trump Administration may consider "decoupling" itself from China. Decoupling, the process of separating two countries' economies and supply chains, would represent a major change in U.S.-China relations.

"There may be a time when we have decoupling, that's something that the president may consider," Mnuchin said, responding to President Donald Trump's June 18 tweet in which Trump wrote, "The U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China."

Trump's tweet contradicted U.S. Trade Representative Robert Lighthizer's testimony before the House Ways and Means Committee on June 17. During his testimony, Lighthizer said he favored strengthening supply chains in the U.S. but didn't think the U.S. could completely decouple with China.

"Do I think that you can sit down and decouple the United States economy from the Chinese economy? No," Lighthizer said at the time. "I think that was a policy option years ago. I don't think it's a policy, a reasonable policy option at this point."

Mnuchin's comment in Monday's Fox News interview continues the Trump administration's onging 19-month trade war with China that has so far culminated in each country placing billions of dollars worth of tariffs on each other's imported goods.

In early January, the U.S. signed a trade deal with China, but the South China Morning Post noted, "We must bear in mind that the trade war is not over yet—the U.S. hasn't revoked all its tariffs on China and China is still implementing its retaliatory measures."

"There are still many uncertainties down the road," it noted, including whether each country actually honors the deal. Such uncertainties have only increased because of the coronavirus epidemic.

U.S. Treasury Secretary Steven Mnuchin
U.S. Treasury Secretary Steven Mnuchin testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill July 12, 2018 in Washington, DC. Mnuchin answered questions about the "the State of the International Financial System." Chip Somodevilla/Getty

Tariffs still remain on hundreds of billions of dollars worth of Chinese products. Trump has also threatened new tariffs and even "to cut off the whole deal" with China as a way to punish the country for allegedly allowing the COVID-19 pandemic to spread.

In retaliation, Chinese officials and state-owned media accused the U.S. of blaming China to deflect its own mishandling of the epidemic.

During the interview, Mnuchin was asked about a quote from the recent book of Former National Security Adviser John Bolton in which Bolton called Mnuchin "a big business Democrat" and accusing him of wanting to "go light" on financial sanctions against China and other countries like Iran.

Calling Bolton's book "full of inaccuracies," Mnuchin claimed the Trump Administration has placed more sanctions than numerous past administrations combined.

Mnuchin is scheduled to testify to House Financial Services Committee on June 30 at 12:30 p.m..