Trump says he'd 'rather not' put tariffs on China

Donald Trump highlighted tariffs as a powerful negotiation tool, while China cautioned that a trade war would yield no winners.

US President Donald Trump said he would "rather not" impose tariffs on China, after repeated pledges on the campaign trail to hit America's biggest economic rival with hefty import levies.

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Asked in an interview with Fox News if he could make a deal with Chinese leader Xi Jinping on Taiwan and trade, Trump replied: "I can do that because we have something that they want, we have a pot of gold."

"We have one very big power over China, and that's tariffs, and they don't want them, and I'd rather not have to use it. But it's a tremendous power over China," the mercurial president said in the interview which aired Thursday in the United States.

After taking office on Monday, Trump said 10 percent tariffs on all Chinese imports could kick in on February 1 -- and on the campaign trail touted a levy as high as 60 percent.

China has warned that there are "no winners" in a trade war and vowed to defend its economic interests.