Trump says China talks coming, Beijing calls for trade war resolution

BIARRITZ, Aug 26 (Reuters): The United States and China sought to ease trade war tensions on Monday, with Beijing calling for calm and US President Donald Trump predicting a deal after markets fell in response to new tariffs from both countries.

Trump, speaking on the sidelines of the G7 summit of world leaders in France, said Chinese officials had contacted US trade counterparts overnight and offered to return to the negotiating table.

Vice Premier Liu He, who has been leading the talks with Washington, said on Monday China was willing to resolve the trade dispute through "calm" negotiations and resolutely opposed the escalation of the conflict.

Trump welcomed that language and, days after referring to President Xi Jinping as an enemy, heaped praise on his Chinese counterpart.

"They want calm, and that's a great thing, frankly. 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.

"China called last night our top trade people and said 'Let's get back to the table', so we'll be getting back to the table, and I think they want to do something," he said.

In Beijing, Foreign Ministry spokesman Geng Shuang said he had not heard that a phone call between the two sides had taken place. However, China's Commerce Ministry typically releases statements on trade calls. It did not immediately respond to a request for comment.

The increasingly bitter trade war between the world's two largest economies escalated on Friday, with both sides leveling more tariffs on each other's exports. Trump announced an additional duty on some $550 billion of targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of US goods.

On Sunday, the White House said Trump regretted not raising the tariffs even more. But the president also appeared to back off of his threat to order US companies out of China.

Liu, speaking at a tech conference in southwest China's Chongqing, said nobody benefited from a trade war.

"We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war," Liu, who is Xi's top economic adviser, said, according to a government transcript.

"We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world," he said.

The trade war has damaged global growth and raised market fears that the world economy will tip into recession.

Meanwhile, US President Donald Trump said on Monday that he and German Chancellor Angela Merkel discussed a trade deal with the European Union and said he hoped Washington would not have to consider imposing tariffs on German cars.

He was speaking on the sidelines of a G7 summit in the French coastal resort of Biarritz, which Trump said had been productive.