Treasury Secretary Mnuchin: Trump tweet was 'warning shot' to China on currency

Treasury's Mnuchin: We front-loaded economic growth in tax plan
Treasury's Mnuchin: We front-loaded economic growth in tax plan

President Donald Trump wants to make sure China doesn't start manipulating its currency again, Treasury Secretary Steven Mnuchin said Tuesday.

In a tweet Monday, the president accused Russia and China of "playing the currency devaluation game," even though a Treasury report said the countries were not manipulating.

"It was a warning shot at China and Russia about devaluation. China has devalued their currency in the past," Mnuchin said in an interview on CNBC's "Squawk Box." "They've used a lot of their reserves to actually support the currency. The president wants to make sure they don't change their plans, and he's watching it."

Mnuchin also addressed global issues including pending tariffs the White House has announced against China and other trading partners.

Mnuchin declined to speculate whether Trump would opt to join the Trans Pacific Partnership trading agreement, saying only that the president wants to keep negotiating in hopes of getting terms more favorable to the U.S.

"I'm cautiously optimistic," and you'll know when we have a deal," he said.

'Strong economic growth'

On a separate issue, Mnuchin said rising economic growth will help pay for a temporary shortfall in tax receipts.

"We're now at a point where we're comfortably within our 3 percent or higher sustained economic growth," he said. "The difference between 2.2 and 3 percent will pay for the tax cuts."

Congress passed a White House-backed bill in December 2017 that slashed the corporate rate from 35 percent to 21 percent and rolled back rates for millions of Americans.

Critics say it will blow a hole in the federal budget, and the Congressional Budget Office last week said the deficit will reach $1 trillion by 2020.

However, Mnuchin and other administration officials maintain that while tax receipts may be slow at first, the accelerated pace of growth will more than make up for the difference.

"We're seeing very strong economic growth," he said. "We literally have met with hundreds of executives, small companies, big companies, and thousands of workers. We're beginning to see the impact of the tax cuts, specifically people investing large amounts of money back into the United States."