The U.S. and China are set to begin trade talks again after a tumultuous week of tension-escalating threats of new tariffs and tariff-rate increases that roiled international markets and alarmed the U.S. ag sector.

President Donald Trump, speaking to reporters in Biarritz, France, at a G7 summit, said China reached out to him, eager to restart talks to try to end the trade war. Trump promised those talks will happen soon and even hinted that he might back away from recent new tariff threats.

“China called, last night, our top trade people, and said, ‘Let's get back to the table,’” Trump said. “So, we'll be getting back to the table. And I think they want to do something. They've been hurt very badly, but they understand this is the right thing to do. And I have great respect for it. I have great respect for it. This is a very positive development for the world.”

U.S. Treasury Secretary Steven Mnuchin, who is in France with Trump and U.S. Trade Representative Robert Lighthizer, lauded optimistic comments from Chinese Vice Premier Liu He and stressed he is looking “forward to continuing our discussions with (Liu). Ambassador Lighthizer and I will expect to continue those shortly.”

It was just Friday that Trump vowed to raise tariff rates by 10% on $550 billion worth of Chinese goods. Trump was angered over China announcing earlier that day that it would retaliate against U.S. promises of new tariffs on about $300 billion worth of Chinese goods. China had just promised to increase tariff rates on  $75 billion worth of U.S. goods, including a long list of farm commodities ranging from soybeans to pistachios.

Trump on Monday heaped praise on Chinese President Xi Jinping and predicted the U.S. is now in a good place to get a favorable deal.

Trump, when asked about rescinding or delaying his latest tariff threats, said: “Well, I think anything is possible. I can say we're having very meaningful talks.  Much more meaningful than, I would say, at any time, frankly.  And I think, for the most part, it's because we are doing very well.  China is a great country. I consider President Xi to be a great leader.” 

But there are also stern messages coming out of China. Geng Shuang, a spokesman for China’s Foreign Ministry, was quoted Monday by Xinhua News – a government-controlled media outlet – and demanded that the U.S. back off its latest tariff threats.

"We strongly urge the United States not to miscalculate the situation and immediately cease its wrong actions,” Geng said. “If the United States implements its plan of raising tariffs, China will definitely continue to take measures and safeguard its own legitimate rights.”

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