Trump on Thursday also directed Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the U.S. views as strategic. He has said he also wants a $100 billion decrease in the U.S. trade deficit with China.

A day after Trump’s announcement, which led to a selloff in global markets, China unveiled tariffs on $3 billion of U.S. imports in response to steel and aluminum duties ordered by Trump earlier this month. The White House then declared a temporary exemption for the European Union and other nations on those levies, making the focus on China clear.

Though Beijing’s actions so far are seen by analysts as measured, there may be more to come. China is conducting research on further lists of U.S. imports subject to tariffs, which are likely to cover airplanes, computer chips and the tourism industry, China Daily reported on Saturday, citing Wei Jianguo, a former vice commerce minister.

Automobiles, Semiconductors

Mnuchin said the two countries agree on reducing the deficit to some degree and are trying to “to see if we can reach an agreement as to what fair trade is for them to open up their markets, reduce their tariffs, stop forced technology transfer.”

Both Mnuchin and U.S. Trade Representative Robert Lighthizer detailed a list of specific requests for China in a letter late last week to Vice Premier Liu He, the Wall Street Journal reported, citing people familiar with the matter.

The list includes a reduction of Chinese tariffs on U.S. automobiles, more Chinese purchases of U.S. semiconductors and greater access to China’s financial sector by American companies, the report said, adding that Mnuchin is weighing a trip to Beijing for negotiations.

The U.S. will proceed with tariffs “unless we have an acceptable agreement that the president signs off on,” Mnuchin said Sunday.

“We’re not afraid of a trade war, but that’s not our objective,” he said. “In a negotiation you have to be prepared to take action.”

Mnuchin’s comments Sunday came after the administration announced a deal with South Korea that he said would limit the amount of steel imported into the U.S. The U.S. trade gap in goods with China surged 8.1 percent in 2017 to a record $375 billion, according to February data from the U.S. Commerce Department.

Equity indexes tumbled worldwide last week, with European stocks falling to the lowest in more than a year. Stocks in Asia resumed declines Monday, falling from Sydney to Shanghai.

Trade sanctions may have “quite serious” psychological impact on markets, former U.S. Treasury secretary Larry Summers said in a Bloomberg Television interview in Beijing. “It’s both a matter of what actually happens in terms of tariffs and the psychology,” he said. “I hope the temperature will get taken very far down on both sides.”

A Chinese Communist Party newspaper on Saturday listed U.S. companies that’d be “most damaged” if a trade war began -- including Apple Inc., Intel Corp. and Boeing Co.

Apple’s Tim Cook said during a forum in Beijing on Saturday he’s going to encourage that “calm heads prevail” on the potential trade war. China is Apple’s single most important market outside the U.S.

“The countries that embrace openness do exceptional and the countries that don’t, don’t,” he said. “It’s not a matter of carving things up between sides.”