Trump denies China trade war causing friction at G7

President Donald Trump on Sunday denied that his trade war with China is causing friction at the G7 summit, but indicated he will hold off from a threatened further escalation for now.

"I think they respect the trade war. It has to happen," Trump told reporters in Biarritz, France, where he was meeting with other leaders of the G7 group.

Asked if the other leaders had criticized the massive trade struggle, he said "no, not at all. I haven't heard that".

In fact, European members of the G7, which includes Britain, Canada, Germany, France, Italy, Japan and the United States, have repeatedly expressed concern over the trade war's threat to the wider global economy.

British Prime Minister Boris Johnson was the latest, telling Trump at a breakfast meeting Sunday that "we don't like tariffs on the whole".

"We are in favor of trade peace," he said.

Talks between Washington and Beijing on ending what Trump says is a massively unfair trade relationship have hit a brick wall.

On Friday, Trump responded to a new hike in Chinese tariffs on US goods by imposing heavy extra levies against a total of $550 billion in Chinese imports.

But Trump signalled Sunday what might be a slight softening in his position, admitting that he did have doubts about escalating the trade war.

"I have second thoughts about everything," he said.

He said he would hold off for now on declaring a national emergency to invoke an obscure law that he says gives him the power to order US companies out of China.

"I have the right to, if I want. I could declare a national emergency," he said. "I have no plan right now."

Trump first brandished the possibility of the drastic measure on Friday, when he tweeted that American companies "are hereby ordered to immediately start looking for an alternative to China."

Despite the more nuanced comments Sunday, Trump doubled down on the rationale for his high-risk strategy with China, saying "they steal and take out, and -- intellectual property theft, anywhere from $300 billion to $500 billion a year."

"We have a total loss of almost a trillion dollars a year," he said. "In many ways, that's an emergency."

As he has repeatedly over the last months, Trump insisted that China will eventually cave in to US demands for reforming its economic model and transforming the trade relationship.

"We're talking. I think they want to make a deal much more than I do," he said.