CNBC Exclusive: CNBC Transcript: U.S. Treasury Secretary Steven Mnuchin on CNBC’s “Power Lunch” Today

WHEN: Today, Friday, April 6, 2018

WHERE: CNBC's "Power Lunch"

Following is the unofficial transcript of a CNBC interview with U.S. Treasury Secretary Steven Mnuchin on CNBC's "Power Lunch" (M-F 1PM-3PM) today, Friday, April 6th. Following are links to video from the interview on CNBC.com: https://www.cnbc.com/video/2018/04/06/treasury-secretary-mnuchin-trump-has-been-very-clear-on-defending-free-fair-trade.html?play=1, https://www.cnbc.com/video/2018/04/06/treasury-secretary-mnuchin-we-can-manage-trade-strategy-without-hurting-economy.html?play=1, https://www.cnbc.com/video/2018/04/06/treasury-secretary-mnuchin-investors-should-be-focused-on-where-market-is-long-term.html?play=1, https://www.cnbc.com/video/2018/04/06/treasury-secretary-mnuchin-we-need-to-see-growth-from-tax-cuts-to-pay-for-permanent-individual-tax-cuts.html?play=1, https://www.cnbc.com/video/2018/04/06/treasury-secretary-mnuchin-sanctions-are-targeting-certain-behaviors-of-russian-oligarchs.html?play=1, & https://www.cnbc.com/video/2018/04/06/treasury-secretary-mnuchin-china-will-see-a-tremendous-transformation-in-growth.html?play=1.

All references must be sourced to CNBC.

MICHELLE CARUSO-CABRERA: WELL ON THAT NOTE, LET'S GET RIGHT TO THE BIG NEWSMAKER OF THE HOUR, TREASURY SECRETARY STEVE MNUCHIN. AND SENIOR ECONOMICS REPORTER STEVE LIESMAN JOINING US.

STEVE LIESMAN: AND JOINING US NOW TREASURY SECRETARY STEVEN MNUCHIN. THANK YOU FOR JOINING US.

SECRETARY MNUCHIN: IT IS GREAT TO BE HERE WITH YOU.

LIESMAN: LET'S GO BACK AND TALK ABOUT THE END OF MARCH, MR. SECRETARY YOU SAID YOU HOPED TO AVOID A TRADE WAR WITH CHINA. IN THAT PERIOD OF TIME, THE CHINESE HAVE PUT RETALIATORY TARIFFS ON $50 BILLION OF U.S. GOODS. AND THE PRESIDENT LAST NIGHT THREATENED AN ADDITIONAL TARIFFS ON ADDITIONAL $100 BILLION OF U.S. GOODS. IS THIS NOW A TRADE WAR, MR. SECRETARY?

MNUCHIN: NO, IT IS NOT AND OUR OBJECTIVE IS STILL NOT TO BE IN A TRADE WAR WITH THEM, BUT LET ME BE PERFECTLY CLEAR, PRESIDENT TRUMP HAS BEEN FROM DAY ONE VERY CLEAR ON WE ARE GOING TO DEFEND FREE AND FAIR TRADE. AND A YEAR AGO AT MAR-A-LAGO PRESIDENT TRUMP AND PRESIDENT XI DISCUSSED TRADE. WE'VE BEEN WORKING WITH THEM OVER THE LAST YEAR AND ON THE ONE HAND, WE'RE WILLING TO CONTINUE NEGOTIATIONS ON THE OTHER HAND THE PRESIDENT IS ABSOLUTELY PREPARED TO DEFEND OUR INTERESTS.

LIESMAN: MR. SECRETARY, THERE WAS AN ARTICLE IN THE "WALL STREET JOURNAL" ON THE 26th OF MARCH THAT SAID THERE WERE QUIET NEGOTIATIONS GOING ON. TODAY A CHINESE OFFICIAL SAID THAT IT IS ABSOLUTELY WRONG THAT THERE ARE NEGOTIATIONS GOING ON BEHIND THE SCENES AND LARRY KUDLOW SAID NEGOTIATIONS HAVEN'T BEGUN YET. WONDER IF YOU COULD SQUARE THAT CIRCLE FOR US? ARE NEGOTIATIONS GOING ON AND HOW ARE THOSE NEGOTIATIONS GOING, IF THE TWO THINGS THAT I JUST MENTIONED JUST HAPPENED, WHICH IS THE RETALIATORY TARIFFS AND THREAT OF ADDITIONAL TARIFFS FROM THE PRESIDENT?

MNUCHIN: WELL LET ME JUST PUT THIS IN PERSPECTIVE. SO WE'VE BEEN VERY CLEAR THE 301 HAS BEEN IN THE WORKS FOR A LONG PERIOD OF TIME. WE'RE VERY CLEAR THAT $50 BILLION ON POTENTIAL TARIFFS THAT WE PUT ON 301, ABOUT 10% OF THE GOODS THAT WE BUY FROM THEM, IT IS $500 BILLION OF GOODS. CHINA RESPONDED WITH $50 BILLION AGAINST US. WE THINK THAT WAS UNFAIRLY TARGETING OUR INDUSTRY AS THAT IS 38% OF WHAT THEY BUY FROM US. SO AS A RESULT OF THAT, THE PRESIDENT RESPONDED WITH POTENTIALLY ANOTHER $100 BILLION. SO ON THE ONE HAND, AS I SAID, WE'RE WILLING TO NEGOTIATE WE ARE IN COMMUNICATION WITH THEM REGULARLY. I'M NOT GOING TO COMMENT ON THE SPECIFICS OF THE NEGOTIATION.

LIESMAN: SO YOU SAY WE'RE WILLING TO NEGOTIATE. ARE YOU SAYING WE'RE NOT YET NEGOTIATING ON THESE TOPICS. AS YOU KNOW MR. SECRETARY, THIS IS OF CRITICAL IMPORTANCE TO THE MARKETS WHICH ARE DOWN 332 POINTS IN PART BASED ON THIS LATEST TRADE COMMENTS FROM THE PRESIDENT. SO IS THERE NEGOTIATIONS GOING ON RIGHT NOW? HAVE THEY BEEN GOING ON BEHIND THE SCENES OR HAVE THEY NOT BEEN GOING ON?

MNUCHIN: AGAIN, WHAT I WOULD SAY – I WANT TO BE CAREFUL BECAUSE –

LIESMAN: I GET IT.

MNUCHIN: AGAIN, ANY TIME YOU ARE NEGOTIATING, OBVIOUSLY WE ARE NOT GOING TO DO THIS AND LAY OUT OUR NEGOTIATIONS IN THE PUBLIC DOMAIN. SO I AM IN COMMUNICATIONS – I'M NOT GOING TO COMMENT ON WHERE WE ARE IN THE NEGOTIATIONS. YOU KNOW THAT THE VICE PREMIER CAME HERE LAST MONTH AND WE HAD DISCUSSIONS. AGAIN, LET ME JUST BE CLEAR IN THAT PRESIDENT TRUMP IS ACTIVELY INVOLVED IN THE DISCUSSIONS WITH ME AND AMBASSADOR LIGHTHIZER AND OTHERS. ON THE ONE HAND, WE ABSOLUTELY ARE WILLING TO NEGOTIATE AND NOT GET INTO TRADE WARS. BUT ON THE OTHER HAND, THE PRESIDENT IS PERFECTLY WILLING TO DEFEND INTERESTS. SO THIS IS A VERY CLEAR STRATEGY –

LIESMAN: UNDERSTOOD --

MNUCHIN: AND WE ALSO ANNOUNCED YESTERDAY AS IT RELATES TO AGRICULTURE, WE'RE GOING TO PROTECT OUR FARMERS. THE PRESIDENT INSTRUCTED SECRETARY PERDUE TO WORK WITHTHE REST OF THE CABINET TO PROTECT OUR FARMERS FROM UNFAIR TARGETING.

LIESMAN: ONE OTHER QUESTION OF ABIDING CONCERN TO THE MARKET HOW POLICY IS FORMED IN THE ADMINISTRATION, CAN YOU TELL US -- DID YOU KNOW ABOUT THE PRESIDENTS THREAT OF $100 BILLION OF TARIFFS BEFORE HE ANNOUNCED IT?

MNUCHIN: OF COURSE I DID. I'VE BEEN AN ACTIVE DISCUSSIONS WITH THE PRESIDENT ALMOST DAILY ON THIS, ALONG WITH AMBASSADOR LIGHTHIZER AND THE REST OF THE ECONOMIC TEAM, LARRY KUDLOW AND OTHERS. THIS IS VERY WELL ORGANIZED. OUR STRATEGY IS VERY CLEAR AND WE'VE BEEN VERY CLEAR IN DESCRIBING OUR STRATEGY TO CHINA IN WHAT WE WANT.

LIESMAN: AND CAN YOU TELL US WHAT YOU TOLD THE PRESIDENT ABOUT THE POTENTIAL ECONOMIC EFFECTS OF THIS ADDITIONAL $100 BILLION OF TARIFFS, OF TARIFFS ON GOODS?

MNUCHIN: AGAIN, I THINK FROM OUR PERSPECTIVE AND IN OUR ANALYSIS, AGAIN FIRST OF ALL WE HAVEN'T ANNOUNCED WHAT THE NEXT $100 BILLION WILL BE ON. BUT AGAIN, I THINK THAT WE CAN MANAGE THIS WITHOUT SIGNIFICANT DIFFICULTY TO THE OVERALL ECONOMY. THERE IS OBVIOUSLY CERTAIN SECTORS IF WE DID GET IN A TRADE WAR CHINA COULD TARGET AND WE'LL DEAL WITH THAT, SPECIFICALLY AGRICULTURE, WE HAVE WAYS OF DEALING WITH THAT. I WON'T GET INTO THE SPECIFICS OF NEGOTIATION BUT THE PRESIDENT IS DAILY INVOLVED IN THESE CONVERSATIONS WITH THE ECONOMIC TEAM AND ON THE ONE HAND HE'S ABSOLUTELY WILLING TO DEFEND OUR INTERESTS. SO LET ME BE CLEAR, THIS IS ABOUT FREE AND FAIR TRADE CHINAS BEEN ABLE TO DO TRADE FREELY IN OUR COUNTRY. OUR COMPANIES HAVE BEEN LIMITED. THERE HAS BEEN FORCED TECHNOLOGY AND FORCED JOINT VENTURES AND OUR OBJECTIVE THE GOOD NEWS IS PRESIDENT XI AND PRESIDENT TRUMP HAVE A VERY GOOD RELATIONSHIP. THEY SPEAK REGULARLY. THERE IS CLEAR UNDERSTANDING. WE HAVE MUTUAL INTEREST IN REDUCING THE TRADE DEFICIT, SOMETHING THAT CHINA HAS AGREED WITH US. AND AS I'VE SAID BEFORE, I'M CAUTIOUSLY OPTIMISTIC THAT WE WILL BE ABLE TO WORK THIS OUT.

MELISSA LEE: MR. SECRETARY, JUST HOMING IN ON YOUR COMMENT THAT WE ARE NOT IN A TRADE WAR. IF THIS IS NOT A TRADE WAR, WHAT IS DOES A TRADE WAR IN THE ADMINISTRATIONS VIEW LOOK LIKE? BECAUSE THE MARKETS RIGHT NOW BELIEVE WE ARE IN A TRADE WAR. WHEN YOU LOOK AT INDIVIDUAL STOCKS, THAT COULD BE CAUGHT UP IN A TRADE WAR, LIKE CATERPILLAR AND BOEING AND DEERE EACH LOST 6% IN THE LAST MONTH AND IT CERTAINLY FEELS LIKE A TRADE WAR TO THEM AND WHAT WOULD A TRADE WAR LOOK LIKE IF THIS IS NOT BEGINNING OF ONE?

MNUCHIN: WELL, I DIDN'T SAY IT IS NOT THE BEGINNING OF ONE. I SAID THAT WE'RE ACTUALLY NOT IN A TRADE WAR.

LEE: SO IT IS THE BEGINNING OF THE TRADE WAR?

MNUCHIN: SO AGAIN, RIGHT NOW WE'VE INITIATED A PLAN, THE TARIFFS WILL TAKE SOME PERIOD OF TIME TO GO INTO EFFECT. THEY'LL BE PUBLIC COMMENTS. SO WHILE WE'RE IN THE PERIOD BEFORE THE TARIFFS GO ON, WE'LL CONTINUE TO HAVE DISCUSSIONS BUT THERE IS THE POTENTIAL OF A TRADE WAR. AND LET ME JUST BE CLEAR, IT IS NOT A TRADE WAR. THE PRESIDENT WANTS RECIPROCAL TRADE. SO RIGHT NOW CHINA BUYS ABOUT $130 BILLION OF GOODS FROM US AND WE BUY ABOUT $500 BILLION OF GOODS FROM THEM. THAT IS NOT RECIPROCAL FREE AND FAIR TRADE.

SARA EISEN: MR. SECRETARY, IT IS SARA EISEN. YOU ONCE TOLD US THAT THIS WAS A MARK TO MARKET BUSINESS AND YOU LOOK AT THE MARKETS TO SEE WHAT THEY THINK OF THE POLICY. SO HOW ARE YOU PROCESSING WHAT WE'VE SEEN? THE WORST START TO A SECOND QUARTER SINCE 1929. WHAT MESSAGE ARE YOU GETTING AND DO YOU GUYS NOT CARE AS MUCH ABOUT THE MARKETS THESE DAYS?

MNUCHIN: I THINK WHEN I REFERRED TO THAT, I SPECIFICALLY WAS REFERRING TO ALSO KIND OF ECONOMIC GROWTH AND GDP. SO AS YOU KNOW, OUR ECONOMIC POLICY, WE'VE BEEN VERY FOCUSED SINCE THE CAMPAIGN ON ACHIEVING 3% OR GREATER SUSTAINED GDP. WE ARE WELL ON OUR WAY TO THAT GOAL. THE ECONOMIC PLAN FROM DAY ONE HAS BEEN A COMBINATION OF TAX REFORM, REGULATORY RELIEF AND TRADE. I THINK THE PRESIDENT HAS BEEN ENORMOUSLY SUCCESSFUL ON THE FIRST TWO AREAS AND NOW WE'RE FOCUSED ON TRADE. AND IF WE ARE SUCCESSFUL, THIS WILL BE A GREAT BENEFIT TO U.S. COMPANIES, HAVING FREE AND FAIR RECIPROCAL TRADE AROUND THE WORLD.

CARUSO-CABRERA: A LOT OF OUR GUESTS BELIEVE THE REASON THE MARKET IS DOWN SO MUCH, MR. SECRETARY, AND THIS IS MICHELLE HERE. HELLO. THE REASON THEY THINK THE MARKET IS DOWN SO MUCH THIS QUARTER IS BECAUSE OF THIS BREWING TRADE WAR. DO YOU THINK THAT IS THE REASON WHY THE MARKET IS DOWN? WHAT WOULD YOU SAY TO OUR MARKET PARTICIPANTS WHO ARE VERY, VERY CONCERNED ABOUT A TRADE WAR?

MNUCHIN: WELL THE FIRST THING I WOULD SAY IS THAT PEOPLE WHO ARE GOING TO INVEST IN THE MARKET SHOULD BE FOCUSED ON WHERE IT IS IN THE LONG-TERM. I CONTINUE TO THINK THE PROSPECTS FOR THE U.S. ECONOMY ARE VERY STRONG. THE PROSPECTS FOR U.S. COMPANIES ARE VERY STRONG AND I THINK IN TERMS OF AREAS TO INVEST AROUND THE WORLD, THE UNITED STATES IS STILL THE BEST PLACE TO INVEST. YOU KNOW, WHERE THE MARKET IS IN THE SHORT-TERM, WE'VE OBVIOUSLY HAD A LOT OF VOLATILITY. THERE'S BEEN DIFFERENT THINGS THAT HAVE IMPACTED THAT AND IN THE SHORT-TERM, I THINK WE'RE IN A PERIOD OF GREATER VOLATILITY AS I'VE SAID BEFORE SOME OF THIS HAS TO DO WITH THE WAY ELECTRONIC TRADING AND OTHER THINGS WORK. BUT AGAIN, THE PRESIDENT IS VERY FOCUSED ON MAKING SURE WE HAVE THE PROPER LONG-TERM GROWTH AND I THINK WE'RE VERY PLEASED. THE TAX PLAN IS JUST BEGINNING TO KICK IN, WE'RE SEEING THE BENEFITS OF THAT. WE'RE SEEING THE BENEFITS OF MANY INTERNATIONAL COMPANIES INVESTING IN THE UNITED STATES AS A RESULT OF CHANGES IN THE TAX PLAN. WE'RE SEEING WORKERS GET MORE MONEY IN THEIR PAYCHECKS. SO WE'RE VERY PLEASED WITH THE RESULTS SO FAR.

CARUSO-CABRERA: DO YOU NOT CARE THAT THE MARKET IS DOWN SO MUCH?

MNUCHIN: AGAIN, I DON'T REALLY FOCUS ON WHERE THE MARKET IS EVERY SINGLE DAY AGAIN. I THINK PART OF THE CORRECTION WAS REASONABLE IN THE SENSE THAT THE MARKETS HAVE STILL BEEN UP A TON SINCE THE ELECTION. SO IF YOU LOOK AT WHERE THE MARKETS ARE, PEOPLE STILL HAVE VERY, VERY BIG GAINS. AND AGAIN, I THINK PEOPLE SHOULD BE FOCUSED ON WHERE IT IS IN THE LONG-TERM, SIX MONTHS, A YEAR, THREE YEARS FROM NOW.

LEE: BUT ON THAT VERY POINT, MR. SECRETARY, IT IS MELISSA, THE MARKETS ARE A FORWARD-LOOKING MECHANISM. AND SO WHAT THE MARKET IS TELLING US RIGHT NOW WITH THE DECLINES IS THAT IT IS WORRIED ABOUT THE IMPACT OF A TRADE WAR DOWN THE LINE. IT IS WORRIED THAT CHINA COULD DECIDE, HEY, I'M NOT GOING TO BUY BOEING AIRCRAFT, I'M GOING TO BUY AIRBUS AIRCRAFT. OR THAT CHINA COULD DECIDE TO PUT TARIFFS ON GOODS OUT OF THE TECH SECTOR, PARTICULARLY SEMICONDUCTORS, WHICH RELIES ON CHINA FOR ABOUT A QUARTER OF ITS ANNUAL REVENUE. CAN YOU TELL THE MARKETS THAT THEY SHOULD NOT BE WORRIED ABOUT THOSE LONGER TERM POSSIBLE CONSEQUENCES? BECAUSE THAT IS WHAT THEY ARE FOCUSED ON.

MNUCHIN: WELL WHAT I WOULD SAY IS THAT THE MARKETS, FIRST OF ALL, AREN'T ALWAYS EFFICIENT. SO ONE OF THE GREAT OPPORTUNITIES IS THERE ARE INEFFICIENCIES IN THE MARKET AND THAT IS WHAT CREATES OPPORTUNITIES FOR INVESTMENTS. BUT I WOULD SAY, AGAIN, I UNDERSTAND THAT THERE IS A LEVEL OF RISK THAT WE COULD GET INTO A TRADE WAR. ON THE OTHER HAND, WE'RE CONTINUING TO BE WILLING TO NEGOTIATE AND LOOK AT THAT. BUT WHAT I WOULD FOCUS ON, AGAIN, WE WANT TO SELL MORE GOODS AROUND THE WORLD. THE FACT THAT CHINA BUYS $130 BILLION OF GOODS, THAT IS LESS THAN ALL OF OUR MAJOR TRADING PARTNERS. SO AGAIN, THIS IS A TERRIFIC OPPORTUNITY FOR U.S. COMPANIES IF THEY ARE TREATED FAIRLY AND WE HAVE FREE AND FAIR RECIPROCAL TRADE. NOT FORCED JOINT VENTURES, NOT TECHNOLOGY BEING FORCED TO MOVE OVER THERE. SO AGAIN, I THINK THESE ARE ALL LONG-TERM POSITIVE THINGS THAT THE PRESIDENT IS WILLING TO DEFEND U.S. INTERESTS AND THAT IS HE'S FOCUSED ON.

LIESMAN: MR. SECRETARY, STEVE LIESMAN AGAIN. I WANT TO THANK YOU FOR BEING HERE. IT IS FOUR-ON-ONE I WOULD LIKE TO POINT OUT AND SO THE VIEWERS KNOW THAT. I WANT TO TURN THE TOPIC HERE TO THE ISSUE OF THE ECONOMY AND POLICY. THERE HAS BEEN TALK ABOUT MAKING THE TAX CUTS PERMANENT, THE INDIVIDUAL TAX CUTS PERMANENT. DO YOU FAVOR THAT AND HOW WOULD YOU DEAL WITH THE DEFICIT EFFECTS FROM MAKING THE PERMANENT – THE INDIVIDUAL TAX CUTS PERMANENT?

MNUCHIN: WELL, I DO FAVOR THAT. I THINK THAT THE PERSONAL SIDE OF THE TAX CUTS ARE A VERY IMPORTANT PART OF THE PLAN. THAT'S SOMETHING THAT WE ARE IN DISCUSSIONS WITH – WITH CONGRESS ABOUT AND SOMETHING WE'LL CONSIDER. I THINK WE NEED TO SEE THE ECONOMIC GROWTH THAT WE EXPECT THAT WILL THEN GET PEOPLE COMFORTABLE, THAT WE CAN PAY FOR THAT. BUT I THINK AS YOU KNOW, THE REASON WHY WE DIDN'T MAKE THEM PERMANENT WAS REALLY A FUNCTION OF WE NEEDED TO USE RECONCILIATION BECAUSE WE DIDN'T HAVE DEMOCRATS ON BOARD. BUT I WOULD HOPE THAT THE DEMOCRATS EVENTUALLY WILL SUPPORT WHAT HAVE BEEN THE MIDDLE CLASS TAX CUTS AND VERY IMPORTANT FOR OUR WORKERS.

LIESMAN: WHAT ABOUT THE DEFICIT IMPLICATIONS?

MNUCHIN: ALRIGHT, AS WE'VE SAID BEFORE, THE DEFICIT IMPLICATION, IF WE GET THE GROWTH, WE CAN AFFORD THIS –

LIESMAN: AND SO YOU THINK – THEMSELVES?

MNUCHIN: I DO, BUT AGAIN, I DON'T THINK THIS IS SOMETHING WE'RE GONNA HAVE RIGHT NOW IN THE SHORT-TERM OBVIOUSLY BEFORE MID-TERM ELECTIONS. BUT WE'LL DEAL WITH THAT LATER IN THE YEAR. AND I THINK WE'LL HAVE THE GROWTH TO SHOW THAT WE CAN AFFORD THAT.

LIESMAN: ECONOMIC ADVISER PETER NAVARRO RECENTLY SAID HE WAS PUZZLED BY FEDERAL RESEVERE INTEREST RAISE POLICY GIVEN THEY WERE RAISING RATES WITHOUT INFLATION. ARE YOU PUZZLED AND DO YOU THINK IT'S APPROPRIATE TO BE COMMENTING ON FEDERAL RESERVE POLICY FROM THE ADMINISTRATION?

MNUCHIN: WELL FROM MY PERSPECTIVE, I WON'T COMMENT. I DO RESPECT THE FED'S INDEPENDENCE. I HAVE A LOT OF CONFIDENCE IN JAY POWELL AS CHAIR AND THE REST OF THE BOARD AND I THINK THEY'LL BE LOOKING AT THE ECONOMY AND MAKING DECISIONS GOING FORWARD. BUT I HAVE GREAT CONFIDENCE IN HIM AND RESPECT THEIR INDEPENDENCE.

MELISSA LEE: MR. SECRETARY, IT IS MELISSA LEE AGAIN. JUST PIVOTING A TOUCH, REGARDING AMAZON, THE PRESIDENT SAID THAT HE DOES NOT BELIEVE AMAZON PAYS ENOUGH TAXES. COULD YOU ELABORATE ON WHAT "ENOUGH TAXES" WOULD BE?

MNUCHIN: WELL I THINK WHAT THE PRESIDENT IS FOCUSED ON IS AMAZON COLLECTS TO PAY SALES TAX ON THEIR OWN ACCOUNT BUT DOESN'T PAY IT ON THE THIRD PARTY BUSINESS. WE DON'T THINK THAT MAKES SENSE. AND BY THE WAY, WHEN YOU TALK ABOUT SALES TAX, AND MOST STATES THESE ARE SALES AND USE TAXES, SO THEY REALLY -- THEY SHOULD BE PAID AND IT IS EASIER FOR IT TO BE COLLECTED BY THE SELLER THAN HAVE THE CONSUMER DO THIS. BUT I THINK YOU KNOW, THE ISSUE IS IT IS UNFAIR RELATIVE TO THE RETAILERS.

LEE: IF YOU MAKE THE THIRTY PARTY SELLERS COLLECT TAXES AS WELL, OR AMAZON COLLECT ON THE BEHALF OF THE THIRD PARTY SELLERS IT WOULD PUT THEM AT A COST DISADVANTAGE -- OR SELLING COST DISADVANTAGE TO AMAZON ITSELF. AND A LOT THOSE THIRD PARTY SELLERS ARE MOM AND POP BUSINESSES. SO THERE COULD BE REVERSE – TERRIBLE REPERCUSSIONS IN TERMS OF SMALL BUSINESSES IN AMERICA.

MNUCHIN: I DON'T UNDERSTAND HOW THAT IS PUTTING THEM AT A DISADVANTAGE? IT'S ACTUALLY PUTTING THEM AT A LEVEL PLAYING FIELD WITH EVERY OTHER RETAILER REQUIRED WHEN THEY DO BUSINESS IN STATES TO PAY SALES TAX. AND THAT'S MONEY, BY THE WAY, THE STATES NEED FOR INFRASTRUCTURE AND VERY, VERY IMPORTANT FOR THE STATES ECONOMIES.

EISEN: IS THE PRESIDENT GOING AFTER AMAZON BECAUSE HE'S NOT SATISFIED WITH THE COVERAGE HE GETS IN THE WASHINGTON POST AND BEZOS OWNS THE POST?

MNUCHIN: ABSOLUTELY NOT. OKAY. THE PRESIDENT IS FOCUSED ON AMAZON AND THE ECONOMIC ISSUES THAT ARE IMPACTING RETAILERS ALL AROUND THE COUNTRY. I THINK AS YOU KNOW –

EISEN: BUT HE IS GOING AFTER ONE SPECIFIC COMPANY. WHAT MESSAGE DOES THAT SEND TO AMERICAN COMPANIES AND AMERICAN INDUSTRIES THAT HE SAYS HE IS FIGHTING TO PROTECT?

MNUCHIN: WELL, AGAIN, IN THE CASE OF AMAZON, THEY'VE ABSOLUTELY DOMINATED THE RETAIL BUSINESS. THEY'VE PUT TONS OF RETAILERS OUT OF BUSINESS, SO THAT'S WHAT THE PRESIDENT IS REALLY FOCUSED ON. BUT I THINK AS YOU ALSO KNOW THE PRESIDENT IS FOCUSED ON THE POST OFFICE AND WE'RE IN DISCUSSIONS WITH THE POST OFFICE AND LOOKING AT THAT AND VERY FOCUSED ON THE POSTAL REFORM AS WELL.

CARUSO-CABRERA: ALRIGHT, YEAH, WE'VE BEEN LOOKING AT THE FINANCES OF THE POST OFFICE AND BOY, THEY SURE DO NEED IT IN SOME FORM OR FASHION. YOU ALSO SANCTIONED A NUMBER OF RUSSIAN OLIGARCHS THIS MORNING AND A NUMBER OF RUSSIAN COMPANIES. WHAT'S THE MESSAGE THERE? AND WE NOTICED THAT A LOT OF THEM ARE ENERGY COMPANIES. IS THIS CONNECTED TO THE ADMINISTRATION'S POLICY TOWARD TRYING TO EXPORT MORE ENERGY, MORE L&G, ETC.? WHICH BY THE WAY WOULD HELP OUT THE TRADE DEFICIT THAT THE PRESIDENT HATES SO MUCH.

MNUCHIN: I THINK THEY'RE INDEPENDENT ISSUES BUT I DO THINK THAT -- THAT WE'VE BEEN TALKING ABOUT SANCTIONS, THIS IS PART OF KATSA. WE'VE WORKING ON THESE, AS YOU KNOW, FOR THE LAST COUPLE OF MONTHS WITH CONGRESS. WE CAME OUT WITH A REPORT EARLIER ON THAT HAD A CONFIDENTIAL ACCESS, A CLASSIFIED ANNEX TO IT, AND WE SAID WE'D COME OUT WITH SANCTIONS. THAT IS WHAT WE'VE DONE. AND THESE ARE VERY, VERY IMPORTANT TOOLS THAT WE'RE USING THAT HAVE TREMENDOUS SUPPORT IN CONGRESS, ONE OF THE FEW THINGS THAT WAS PASSED 98-2 BY CONGRESS. AND WE'VE BEEN VERY BUSY AT TREASURY WORKING ON THE SANCTIONS. AND THESE ARE TARGETED AT OLIGARCHS AND GOVERNMENT OFFICIALS, VERY SPECIFICALLY TARGETING CERTAIN BEHAVIOR.

LIESMAN: MR. SECRETARY, JUST A FINAL QUESTION HERE. YOU'RE ABOUT– YOU ARE CURRENTLY ISSUING A LOT OF DEBT, CAN YOU TALK ABOUT WHAT IS GOING TO HAPPEN TO THE DEBT MATURITY? IT SEEMS LIKE IT'S GONNA BE PRETTY HEAVILY TENS AND 20s AND 30s AND THE MARKET HASN'T YET DIGESTED THAT YOU HAVEN'T DONE IT YET. AND JUST TO BRING THE CONVERSATION FULL CIRCLE, ARE YOU CONCERNED HAVING THIS DEBATE YOU'RE HAVING WITH CHINA ABOUT TRADE – THAT THAT COULD EFFECT YOUR ABILITY TO PLACE ALL OF THAT DEBT ON THE LONG END, SPECIFICALLY BECAUSE CHINA IS SUCH A LARGE PURCHASER OF U.S. DEBTS, SIR?

MNUCHIN: I'M NOT CONCERNED ABOUT THAT. THERE ARE LOTS OF BUYERS AROUND THE WORLD FOR U.S. DEBT. AND WITHOUT SPECIFICALLY COMMENTING ON WHAT WE'LL DO, YOU KNOW, I WOULD SAY WE ARE BASICALLY TARGING THE WAM TO REMAIN RELATIVELY CONSTANT. SO WE LOOK AT THE WAM -- WEIGHTED AVERAGE MATURE -- OF THE GOVERNMENT'S DEBT AND WE'RE TARGETING KEEPING IT REASONABLY CONSISTENT.

EISEN: WHAT CAN YOU TELL US ABOUT TALKS ON NAFTA? IS THE PRESIDENT GONNA HAVE A PRELIMINARY DEAL TO PRESENT NEXT WEEK?

MNUCHIN: AMBASSADOR LIGHTHIZER AND OTHERS ARE WORKING VERY HARD AND AGAIN I THINK AS YOU KNOW THIS IS A BIG FOCUS OF THE PRESIDENT. HE WANTS TO RENEGOTIATE THE DEAL, BUT HE'S ALSO VERY DETERMINED THAT WE GET SPECIFIC POINTS. SO NEGOTIATIONS ARE UNDERWAY. AGAIN, I WOULD JUST HIGHLIGHT THIS AS THE PRESIDENT IS FOCUSED ON A LOT OF DIFFERENT ECONOMIC ISSUES AND WE'RE SIMULTANEOUSLY NEGOTIATING ALL OF THESE DEALS. I THINK WE'RE PLEASED -- WE MADE A LOT OF PROGRESS WITH SOUTH KOREA, AS YOU KNOW, WE'RE MAKING PROGRESS ON NAFTA. WE'RE MAKING PROGRESS WITH THE STEEL AND ALUMINUM TARIFFS IN EXEMPTING MANY PEOPLE FROM THAT. SO I THINK ON THE ECONOMIC FRONT, THERE'S JUST A LOT GOING ON AND THE PRESIDENT IS EXTREMELY FOCUSED ON ALL THESE ISSUES AND MAKING SURE THAT THEY'RE GOOD FOR AMERICAN WORKERS AND AMERICAN COMPANIES AND THE ECONOMY.

CARUSO-CABRERA: YOU'VE HIGHLIGHTED A NUMBER OF TIMES THAT WE ONLY EXPORT $130 BILLION WORTH OF PRODUCTS TO CHINA. BECAUSE OF THAT, IF THEY KEEP RATCHETING UP, THEY DO THE TIT FOR TAT AND START TO MEET WHAT THE PRESIDENT IS DOING, THEY ACTUALLY RUN OUT OF STUFF TO PUT TARIFFS ON FROM THE U.S. AND SO GOLDMAN SACHS HAS A REPORT OUT TODAY ABOUT WHAT ARE THE OTHER THINGS THAT THEY COULD DO. YOU SAY YOU'RE NOT WORRIED ABOUT THEM NOT BUYING AS MANY TREASURES, WHICH IS ONE OF THE THINGS THEY TALKED ABOUT. BUT THEY COULD OTHER THINGS MAKING IT MORE DIFFICULT FOR U.S. COMPANIES TO INVEST THERE. HAVE YOU GAMED OUT WHAT HAPPENS IF YOU GET BEYOND THAT $130 BILLION OF WHAT THEY COULD DO WITH TARIFFS?

MNUCHIN: WELL, WE HAVE THOUGHT THROUGH THESE ISSUES. BUT LET'S FOCUS ON THE POSITIVE INSTEAD OF THE NEGATIVE. THE POSITIVE IS THIS IS ONE OF THE LARGEST ECONOMIES IN THE WORLD. OKAY? IT IS TREMENDOUS OPPORTUNITY FOR U.S. BUSINESSES TO THE EXTENT THAT WE CAN COMPETE FAIRLY, OPENLY, WITH FREE AND FAIR RECIPROCAL TRADE. SO AGAIN, THIS IS ABOUT A LEVEL PLAYING FIELD. IF WE CAN CREATE A LEVEL PLAYING FIELD, IF WE CAN CREATE – FOR FINANCIAL SERVICES, FOR SERVICES IN GENERAL, FOR OUR MANUFACTURERS NOT BEING FORCED TO DO JOINT VENTURES, THIS IS ONE OF THE LARGEST OPPORTUNITIES FOR U.S. BUSINESS. AND BY THE WAY I THINK THIS COULD BE A WIN-WIN FOR CHINA AND US. BY CHINA OPENING THEIR ECONOMY, I THINK THEY WILL SEE A TREMENDOUS TRANSFORMATION AND GREAT GROWTH AND SOMETHING THAT'S VERY GOOD FOR THEIR PEOPLE, AS WELL AS OURS.

LIESMAN: AND MR. SECRETARY, I'M JUST GOING TO USE THE PREROGATIVE TO ASK THE FINAL, FINAL, FINAL QUESTION AND I APPRECIATE YOUR BEARING WITH US. I'VE COVERED THE TREASURY FOR MANY YEARS, INTERVIEWED ALMOST EVERY TREASURY SECRETARY AND HONOR TO INTERVIEW YOU AS WELL. TRAVELLED WITH SOME OF THEM TO CHINA AND COVERED THE G-7 AND THE G-20 AND THE RULE IS YOU DON'T PUBLICLY EXCORIATE THE CHINESE, ALL IT LEADS TO IS THEM – GOING -- DIGGING IN THEIR HEELS EVEN FURTHER. AND THE OTHER PART IS YOU ALWAYS DEALT WITH YOUR ALLIES AGAINST CHINA, NEVER ALONE. I THINK THERE IS SOME CONFUSION OUT THERE AS TO WHY THOSE DECADES OF EXPERIENCE OF DOING THINGS WHICH DID RESULT IN FOR EXAMPLE, THE CHINESE STOPPING TO KEEP THE CURRENCY FROM APPRECIATING AGAINST THE DOLLAR, HAS RESULTED IN SOME REFORMS IN CHINA. WHY YOUR WAY? DOING IT INDIVIDUALLY, DOING IT WITH THREATS OF TARIFFS? WHY THAT'S A BETTER WAY TO DO IT?

MNUCHIN: WELL, AGAIN, PRESIDENT TRUMP, I THINK PROBABLY HAS BEST RELATIONSHIP WITH PRESIDENT XI OF ANY PRESIDENT. I THINK THEY'RE IN CONSTANT DIALOGUE. I THINK THAT AT ALL LEVELS OF THE GOVERNMENT WE'VE HAD VERY GOOD DIALOGUE. I THINK WE'VE MADE A LOT OF PROGRESS OVER THE LAST YEAR. AND – BUT THE PRESIDENT IS DETERMINED. AND WE'VE BEEN VERY CLEAR FROM DAY ONE, THERE'IS NO SURPRISES HERE, THERE IS NO ISSUE IN TERMS OF WHAT WE'RE TRYING TO DO. WE'RE TRYING TO CREATE A LEVEL PLAYING FIELD. AND AS THE PRESIDENT SAID WE DIDN'T GET OVERNIGHT. SO THE FACT THAT WE HAVE SUCH A LARGE DEFICIT IS A RESULT OF YEARS AND YEARS OF DIFFERENT THINGS WITH CHINA AND THE PRESIDENT JUST WANTS TO CHANGE THAT. SO AGAIN, I'M CAUTIOUSLY HOPEFUL THAT WE'LL REACH AN AGREEMENT WITH THEM. I THINK THIS COULD BE GOOD FOR US AND GOOD FOR THEM. AND THE PRESIDENT IS VERY INTERESTED IN DEFENDING AND MAKING SURE WE HAVE LEVEL PLAYING FIELD.

LIESMAN: MR. SECRETARY, THANK YOU SO MUCH FOR JOINING US.

MNUCHIN: THANK YOU.

LIESMAN: TREASURY SECRETARY STEVEN MNUCHIN.

For more information contact:

Jennifer Dauble
CNBC
t: 201.735.4721
m: 201.615.2787
e: jennifer.dauble@nbcuni.com

Emma Martin
CNBC
t: 201.735.4713
m: 551.275.6221
e: emma.martin@nbcuni.com

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