WASHINGTON • US President Donald Trump said yesterday that talks with China planned for next month could be called off after the trade war between the world's biggest economies abruptly escalated in recent days.

"We'll see whether or not we keep our meeting in September," Mr Trump said as he left the White House for a fundraiser in the Hamptons.

"If we do, that's fine. If we don't, that's fine."

Mr Trump last week said new tariffs on Chinese imports will take effect on Sept 1, shattering a truce reached with Chinese President Xi Jinping weeks earlier and unleashing tit-for-tat actions on trade and currency policy that risk accelerating a wider geopolitical fight between the two countries.

Trade negotiators are currently scheduled to meet again in Washington next month. Recent escalations have raised the possibility that negotiations could break down once again.

But Mr Trump said the two countries still have "an open dialogue".

"We're doing very well with China," he said. "We're talking to China. We're not ready to make a deal but we'll see what happens."

Mr Trump also called on the Federal Reserve to lower interest rates by a full percentage point, saying the nation's economy was being "handcuffed" by the central bank's monetary policy. He told reporters a strong US dollar was hurting American manufacturers and that the Fed needed to lower rates.

The US President also said he had received a "very beautiful letter" on Thursday from North Korean leader Kim Jong Un and added that he could have another meeting with him.

Mr Trump did not say when such a meeting would take place. North Korea has been testing missiles despite a June 30 meeting between the two leaders at which both agreed to revive stalled working-level talks, which have yet to resume.

The North says the tests have been a warning to the US and South Korea over war games.

"He wasn't happy with the war games," Mr Trump said of Mr Kim's letter. "You know, I've never liked it either."

BLOOMBERG, REUTERS