BIARRITZ (France) • United States President Donald Trump yesterday upped the ante in the escalating trade war with China, with the White House saying Mr Trump wished he had raised tariffs on Beijing even higher, as seven of the world's richest nations met in the French resort town of Biarritz.
But in a rare bright spot for the global economy, which has been roiled by the trade dispute between the world's two largest economies, the US and Japan yesterday said they had agreed on the principles of a major trade deal.
Mr Trump, who announced higher tariffs on Chinese goods last week, raised eyebrows during a meeting with British Prime Minister Boris Johnson at the Group of Seven (G-7) summit when he responded in the affirmative to questions from reporters on whether he had any second thoughts about the tariff move.
"Yeah, sure. Why not?" he said. "I have second thoughts about everything," Mr Trump added, after being pressed again. White House spokesman Stephanie Grisham later sought to explain the remark. "His answer has been greatly misinterpreted. President Trump responded in the affirmative - because he regrets not raising the tariffs higher," she said in a statement.
Mr Trump on Friday said the US will impose an additional 5 percentage point duty on some US$550 billion (S$763 billion) in targeted Chinese goods, hours after China unveiled retaliatory tariffs on US$75 billion worth of US goods.
The moves were the latest round in a tit-for-tat trade war that has raised market fears that the world economy will tip into a recession.
Upset about China's retaliation, the President on Friday also said he was ordering US companies to find alternatives to doing business in China.
Mr Trump yesterday focused instead on ironing out trade deals with Japan and Britain on the sidelines of the G-7 summit. Mr Trump called Washington's tentative agreement with Japan that will include Japanese purchases of US agriculture products a "very big transaction".
Japanese Prime Minister Shinzo Abe said both sides had reached consensus on "core elements" and planned to sign a deal at the end of next month, though there was still some work to be done.
Mr Trump yesterday also promised a big trade deal for Britain after it leaves the European Union, as he lavished praise on Mr Johnson as the "right man" to lead his country into Brexit.
Both men appeared upbeat about the chances of success for a new US-Britain trade deal after Mr Johnson a day earlier urged Mr Trump to remove the "considerable barriers" impeding British companies' exports to the US. While Mr Trump yesterday said that a "very big trade deal" was possible quickly, Mr Johnson tempered expectations by saying both sides would not rush the talks.
G-7 summits, which gather Britain, Canada, France, Germany, Italy, Japan and the US, were once a meeting of like-minded allies. But they have become a diplomatic battlefield under Mr Trump. In a radical break from previous meetings of the elite club, there is to be no final statement.
In another surprise, Iranian Foreign Minister Mohammad Javad Zarif flew in for talks at the summit yesterday as French President Emmanuel Macron ramped up efforts to ease tensions between Teheran and Washington.
European leaders have been struggling to tamp down the brewing confrontation between Iran and the US since Mr Trump pulled his country out of Iran's internationally brokered 2015 nuclear deal and reimposed sanctions on the Iranian economy.