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Trump advisers walk back his 'second thoughts' on China trade war

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Image: Treasury Secretary Steven Mnuchin walks to a breakfast at the G7 Sum
Treasury Secretary Steven Mnuchin walks to a breakfast at the G7 Summit in Biarritz, France, on Aug. 25, 2019.   -   Copyright  Erin Schaff NYT via AP, Pool
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President Donald Trump's advisers walked back remarks he made on Sunday at the G-7 Summit in Biarritz, France where he said he was having "second thoughts" about his escalating trade war with China.

At a breakfast meeting with British Prime Minister Boris Johnson, a reporter asked Trump if he had any second thoughts further escalating trade tensions with China.

"Yeah, sure. Why not?" he responded. Asked again, he said: "Might as well. Might as well."

"I have second thoughts about everything," he added after reporters asked him to clarify a third time.

White House officials quickly spun the comments as Trump actually meaning he regrets not raising tariffs further. Officials said Trump's comments were being misinterpreted while others said the president may have misheard the question.

"His answer has been greatly misinterpreted," White House Press Secretary Stephanie Grisham said. "President Trump responded in the affirmative — because he regrets not raising the tariffs higher."

Speaking with "Fox News Sunday," Treasury Secretary Steve Mnuchin said Trump's comments "weren't meant to" back off the trade war, but to "say he's determined as ever on this issue."

Gaggling with reporters, Mnuchin said Trump "doesn't have second thoughts about what he has done."

"If anything, he wanted to clarify if he had second thoughts it would be to raise the tariffs," Mnuchin said, adding that further increasing tariffs is not on the table "at the moment.'

"I was in that meeting, there were a lot of people yelling," Mnuchin told reporters. "I think I found it somewhat hard to hear, I can't speak for the president."

Meanwhile, National Economic Council Director Larry Kudlow told CNNthat Trump "didn't exactly hear the question" and "actually what he was intending to say is that he always has second thoughts and he actually had second thoughts about possibly a higher tariff response to China."

"So it was not to remove the tariff, he was thinking about a higher tariff response," Kudlow added. "Having said that, we're staying with the policy that was announced on Friday, I believe."

The ongoing trade war with China came into focus at the summit after he announced on Friday a new round of tariffs, demanded U.S. companies abandon China, and questioned whether Federal Reserve Chairman Jay Powell was a greater "enemy" to the U.S. than Chinese President Xi Jinping.

Speaking with reporters before leaving the White House on Friday, Trump claimed he has "the absolute right to" force American companies to cease business operations in China. The president earlier in the day announced he would put a new round of tariffs on Chinese goods in retaliation for new Chinese tariffs on $75 billion in U.S. goods.

Trump tweeted late Friday he has broad powers to regulate U.S. economic interests abroad, urging journalists to "try looking at the Emergency Economic Powers Act of 1977."

"Case closed!" he added.

The International Emergency Economic Powers Act allows a president to prohibit most trade with a perceived foe should a national emergency be declared, but the law requires a president to explain his action to Congress and permits Congress to shut down the move.

Trade uncertainty has coincided with much stock market volatility in the U.S. On Friday, the Dow Jones Industrial Average closed down 623 points, or 2.4 percent.

Addressing Trump's Friday comments, Mnuchin told "Fox News Sunday" he thinks what Trump "was saying is that he would order companies to start looking, because he wants to make sure to the extent that we are in an extended trade war, companies don't have these issues and move out of China."

On Jay Powell, Mnuchin said that, "I don't think it was a literal comment that he is an enemy."

Elsewhere on that program, Sen. Amy Klobuchar, D-Minn. and a 2020 presidential candidate, criticized Trump's handling of trade relations.

"China's watching, and I think when you look at trade negotiations with the world, and I saw this in my role in the Senate as chair of the Joint Economic Committee, you got to keep your promises and you've got to keep your threat," Klobuchar said. "He has done neither."

She added: "Negotiating by tweet hasn't been working."

Trump and the top White House economic advisers have dismissed concerns that the economy looks as if it may head into a recession with concerns about the trade war increasing and an economic indicator known as the "inverted yield curve" having flashed.

Last week, Trump, who has accused the media of trying to create a recession, told reporters "I don't see a recession," adding, "Our consumers are rich. I gave a tremendous tax cut, and they're loaded up with money."

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