While Trump has threatened to strike back against China's retaliation to the U.S. tariffs due to take effect July 6 - potentially escalating the tariffs' coverage to $450 billion in Chinese goods - the Treasury Department is also expected to unveil the new investment and export restrictions this week.
Mnuchin tweeted that these reports were "false, fake news", although he did not deny that the plans existed - only that they would be applied not just to China.
President Donald Trump in March directed Treasury Secretary Steven Mnuchin to address investment concerns in critical USA technologies.
Trump has threatened to impose tariffs of 10 percent to 25 percent on up to $450 billion of Chinese goods.
The Wall Street Journal reported that the investment restrictions could apply to deals involving entities in which Chinese investors hold less than 25% "if the administration determines that Chinese investors could obtain the technology through board seats, licensing agreements or other measures". The administration is still debating some aspects of the new investment restrictions that are set to be announced on Friday, a government official said.
He said investors should be bullish on the United States economy, claiming Trump's aggressive trade maneuvers had created new domestic investment.
The S&P 500 Index closed down 1.35%, which says many U.S. investors believe the worst case scenario won't happen with a trade war and I hope they're right but we're gambling with the former casino owner called Donald Trump. "It's something you could only dream about".
Even before China announced the decision, trump warned that, in the case of the adoption of the Beijing reflex action, the United States will again increase taxes.
But US authorities have also been looking into investment restrictions.
Investment plunged more than 90% in the first five months of 2018 compared with the same period a year earlier, according to a report last week by Rhodium Group, a research firm that tracks Chinese foreign investment.
CFIUS could become more powerful in the near future.
The Trump administration is now seeking to pressure China to stop practices that it says unfairly extract tech secrets from American companies.
United States officials have highlighted Beijing's "Made in China 2025" industrial development plan as a source of concern since they say it is a map for dominating key high tech industries from space to telecommunications to robotics to electric cars.
As tensions continue to escalate, trade experts warn there are fewer options to resolve the dispute.
President Xi Jinping's top economic adviser - said China and the European Union had agreed to defend the multilateral trading system, following talks Monday in Beijing.
A somewhat lesser known aspect of Trump's tariff crusade, washing machines and solar panel imports were hit with US$1.8bn and US$8.5bn in duties in January after a report by the US International Trade Commission found that imports of these goods had caused injury to US producers of the targeted products.
"What's crucial is that both sides, no matter what the sector, can, in the spirit of mutual respect and understanding, expand cooperation and manage and control differences, to appropriately handle disputes between the two countries", stated China's Foreign Ministry spokesman Lu Kang.