In a WABC Radio interview Friday, he said: "I'm not saying there won't be a little pain but the market's gone up 40-42 percent, so we might lose a little bit of it, but we'll have a much stronger country when we're finished".
China's state media has rallied against the United States, warning its trade protectionism actions would end in defeat and that the only option now was to hit the U.S. hard enough so it would "remember the pain".
But Wall Street is getting increasingly nervous.
Markets were jolted by the developments, with the Dow Jones industrial average dropping close to 600 points. "There are only losers".
The Chinese statement came after American President Donald Trump instructed the USA trade representative to consider slapping an additional $100 billion in tariffs on Chinese goods on Thursday in a dramatic escalation of the trade dispute between the two countries. The U.S. sold about $130 billion in goods to China in 2017 and faces a potentially devastating hit to its market there if China responds in kind. China responded by imposing similar measures on $3 billion worth of US pork, fruit and other items.
Troubled by China's response, Trump announced Thursday evening that he is considering targeting China with additional trade penalties.
Of course, it may not come to that.
Mnuchin tells CNBC, "We're absolutely willing to negotiate". As trade war costs hit home increasingly as Trump escalates, there's a good chance he will make a concerted effort at negotiation.
Economists are already calculating the potential damage if talks collapse and give way to the biggest trade dispute since World War II.
The threatened US tariffs could be little more than a negotiating tactic aimed at forcing China to address its intellectual property policies. "This is the dumbest possible way to do this", said the politician from the farm-belt state of Nebraska. "The most obvious is, it raises import prices".
Trump made the move when China threatened to retaliate for the first round of tariffs planned by the United States. Farmers will hurt a lot, and soybeans are produced in states where many of them voted for Donald Trump.
In the latest sign of an emerging trade war, President Donald Trump is proposing even more tariffs against China. In other words, China's strategy may be working. It could cancel aircraft orders from Boeing.
Experts say that the seemingly random array of USA products in line for retaliation are actually carefully selected.
"China created this problem, and the president is trying to put pressure on them to fix this, and take back some of the awful actions that they've had in the last several decades", said White House press secretary Sarah Huckabee Sanders during the daily briefing Friday.
The importance of China as a market for soybeans has been driven by an explosion in demand for meat as consumers switch from a diet dominated by rice to one where pork, poultry and beef play an important part.
Were China to want to match Mr Trump's latest threat, it wouldn't have enough American goods imports to target.
Trump also explained that he has asked Agriculture Secretary Sonny Perdue "to use his broad authority to implement a plan to protect our farmers and agricultural interests".