Former Treasury Secretary Henry Paulson said Sunday that trade negotiations between the U.S. and China seemingly derailing this week is a "missed opportunity for both countries."

“This is a deal that can be very good for the United States and China, the Trump administration has been working very hard to do something which I think would make a big difference for American workers, for the American people, in terms of getting more balanced trade, in terms of protecting IPR, in terms of breaking down some big structural barriers to competition," he said on CBS's "Face the Nation."

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“China’s got plenty of problems themselves," Paulson added. "They have an inefficient financial system, inefficient state-owned enterprises, massive misallocations of capital.”

Former Treasury Secretary Hank Paulson on trade talks with China: “They clearly want a deal and need a deal, as does the United States. No one wins a trade war… This, I think, has been a missed opportunity for both countries.” pic.twitter.com/OPSCCw1cS0 — Face The Nation (@FaceTheNation) May 12, 2019

Trade negotiations between the two superpowers seemed to be nearing a conclusion until President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE raised tariffs from 10 percent to 25 percent on $200 billion worth of Chinese imports on Friday and talks broke down.

Chinese negotiators reportedly tried to reverse their vows to address issues like theft of trade secrets and intellectual property.

With Trump's new tariffs in place, some experts have expressed worries about Chinese retaliation, but Paulson said any response would be limited.

“They clearly want a deal and need a deal, as does the United States. No one wins a trade war, so I’m expecting a fairly restrained response," he told CBS.