Both sides have exchanged barbs, and China has threatened to retaliate with tariffs on $3 billion worth of U.S. goods. Financial markets have taken a hit as investors fear a potential global trade war, with U.S. stocks last week suffering their biggest weekly drop since early 2016. In the Fox interview, Mnuchin said while the U.S. was not bluffing with its tariff threats, Washington was simultaneously talking to Beijing to see if a deal could be reached.