Prime Minister John Key says he still has confidence in Todd McClay after the trade minister apologised for the way he handled the reported threat of Chinese trade sanctions.
But he's acknowledged Mr McClay should have given the media, and himself, more details when they were together in Indonesia last week.
Mr McClay admitted on Monday he should have sought a thorough briefing before answering media questions.
Mr Key said Mr McClay had given "dancing on the head of a pin" type of answers when a broader approach was needed.
Labour says the minister should be sacked because he's out of his depth and hasn't been doing his job properly.
Mr Key told reporters Mr McClay had offered an apology, not his resignation, and he still had confidence in the minister.
"I wouldn't expect his resignation," he said.
Mr McClay said in a statement issued earlier on Monday the Ministry of Foreign Affairs and Trade had worked for months assessing the veracity of reports that Chinese officials had threatened New Zealand exporters with trade sanctions.
"I want to make it clear today that there have been discussions and limited correspondence over the past few months as the Ministry of Foreign Affairs and Trade has endeavoured to assess the veracity of these reports.
"I have apologised to the prime minister for not being able to provide more details at the time."
Mr McClay's comments caused confusion following the Fairfax report, published last Sunday, which said Pacific Steel had lodged a confidential application for an investigation into imports of cut-price Chinese steel.
The report said China, believing New Zealand was part of a hostile US-led alliance, had threatened reprisals against dairy, wool and kiwifruit exports if an investigation into product dumping was launched.
Mr McClay at first denied knowing anything about it, saying it was "hypothetical".
He later recalled that when he was in Beijing two weeks ago the New Zealand embassy had told him a New Zealand exporter - Zespri- had reported contact from "an industry body" about the repercussions an inquiry could have.
It still isn't known who contacted Zespri, but the Ministry of Commerce of China, its equivalent of a trade ministry, denied all knowledge of it.
Mr Key says Mr McClay gave the impression the only discussions had been between Zespri and a non-Government organisation.
"That was not correct," he said.
"There had been discussions and a limited amount of correspondence with other parties."
The Government has since received assurances from the Chinese government that there won't be any retaliation if an inquiry into China's steel exports takes place.