Oil in longest losing run in five weeks as trade war deepens

"The tariffs have hit them very hard".

Meanwhile Chinese foreign ministry spokesman Geng Shuang said he was not aware of the calls mentioned by Trump and angrily criticised the latest tariffs at a regular press briefing in Beijing.

The White House said Mr Trump's answer was "misinterpreted". "He used the word calm, I agree with him".

Read the full report at Fox News.

Trump cited Liu's comments as a positive sign, underscoring his seniority, and repeated his assertion that Chinese officials had contacted U.S. trade counterparts overnight and offered to resume negotiations, a claim China declined to confirm.

"Whether or not he (Trump) has a phone call with China doesn't matter, the point is that he is attempting to keep the September meeting scheduled and get back to the negotiating bit". "And one of the reasons that he's a great leader, President Xi, and one of the reasons that China's a great country is they understand how life works", Trump said.

"And I think it's always better to talk than not to talk".

Beijing and Washington were close to a deal last spring but USA officials said China backed away from an agreed text over a reluctance to change laws to address US complaints.

Some gains were eroded, however, after Global Times editor Hu Xijin, who is followed closely by traders due to his perceived links with Chinese authorities, tweeted that communications were only at the "technical level" (link) and didn't "have significance that President Trump suggested".

On Sunday, Trump briefly appeared to express doubts about his approach to the dispute.

The threat of steep new U.S tariffs on imported automobiles and components has loomed over the auto industry and major U.S. trading partners since the the U.S. Commerce Department in February found those imports could impair national security.

The US president was speaking at the G7 summit in France, in response to a question from a reporter.

The developments came after a weekend of tit-for-tat tariffs had rocked financial markets and fueled fears that the standoff would drag the global economy into recession.

On Friday, Mr Trump raised tariffs on Chinese imports, hours after China unveiled plans to increase United States duties.

"Risks to the global economy and markets have increased" following the latest escalations, wrote Mark Haefele, global chief investment officer of UBS Wealth Management, in an overnight research note.

Trump on Monday said the two countries were now dealing on "proper terms".

The change in tone comes after Asian markets tanked and China's currency dropped to an 11-year low after the Trump administration's most recent round of tariffs on $550 billion in Chinese goods.

"We want them to be in places where there're trading partners that respect us and trade with us fairly", Mnuchin said, saying USA businesses would be better off relying less on China in the event the trade war lasts for a long time.

China has consistently agreed to engage in talks even with tariff escalations taking place.