Treasury Secretary Steven Mnuchin says he is not worried about China reducing its U.S. debt holdings as trade tensions between the two countries linger.
“I’m not concerned about that,” Mnuchin told CNBC’s “Power Lunch” on Friday. “There are lots of buyers around the world for U.S. debt.”
China is the biggest holder of U.S. debt. As of January 2018, China held nearly $1.2 trillion worth of U.S. Treasurys.
Mnuchin made his comments after President Donald Trump proposed an additional $100 billion in tariffs on Chinese goods.
The latest move from the U.S. comes after China announced earlier in the week proposed levies that targeted up to $50 billion in U.S. products annually.
Stocks fell on the news Friday as Wall Street grew concerned that a trade war between the U.S. and China could take place in the near future. The Dow Jones industrial average, S&P 500 and Nasdaq composite all dropped more than 1 percent Friday. Equities have also fallen sharply over the past month as investors fret over the possibility of a trade war.
Still, Mnuchin said he was not worried about the recent sell-off in stocks, noting the pullback has been “reasonable.”
“The markets have still been up a ton since the election,” he said. “If you look at where the markets are, people still have very, very big gains.”
Since Nov. 8, 2016, when the election was held, the S&P 500 is up more than 24 percent, while the Dow and Nasdaq have both risen more than 30 percent.
Mnuchin added: “People who are going to invest in the market should be focused on where it’s going to be in the long run. The prospects for the U.S. economy are very strong.”
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