Steven Mnuchin
Credit: Reuters Photo
New York: US President Donald Trump's former Treasury Secretary Steven Mnuchin said on Wednesday that tariffs on US imports are necessary to rebalance trade more in favor of the world's largest economy, but cautioned that financial markets need more clarity.
"The market really wants certainty and it will adjust to whatever they are," he said at the Bloomberg Invest conference in New York. "The problem right now is we don't have certainty."
He said he supports imposing a simpler 10 per cent tariff across the board that would serve as a consumption tax on foreign goods.
Trump's 25 per cent tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20 per cent, sparking trade wars that threatened to slow economic growth and roiled financial markets.
In a recent interview with Reuters, Mnuchin said that serving as Treasury chief during Trump's first term was the "experience of a lifetime," but that in a second term he would advise from outside the administration.
Mnuchin did not say if he is currently advising Trump, and praised the administration's focus on tax cuts, trade and deregulation.
Still, he cautioned about the creation of a sovereign wealth fund by Trump that the president said could be used to buy the popular short video-sharing app TikTok from China-based ByteDance.
The US would have to borrow money because of its budget deficit, Mnuchin noted. He advised against using the fund's resources to buy private assets, saying it should have a limited scope.