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Los Angeles Times
Los Angeles Times
World
Eli Stokols and Chris Megerian

Trump voices 'second thoughts' about escalating trade war with China

BIARRITZ, France _ President Trump said he had "second thoughts" about his escalating trade war with China _ a remark that administration officials rushed to walk back _ as the simmering G7 summit here threatened to overheat Sunday with the arrival of Iran's foreign minister.

Mohammad Javad Zarif, who was Iran's lead negotiator on the nuclear deal that Trump scuttled and European leaders have attempted to salvage, made a surprise visit to the beachfront resort in western France where world leaders are holding their annual meeting.

French officials confirmed they invited Zarif, a move sure to anger Trump, whose administration has been intent on isolating Iran and who hates to share the limelight.

"No comment," Trump said curtly when asked about Zarif.

His "second thoughts" comment came during the announcement of a tentative new trade agreement with Japan, an event that appeared to have been hurriedly put together as administration officials tried to squelch headlines about Trump's apparent doubts over the latest escalation of his yearlong trade war with Beijing, which has unsettled global markets and U.S. business leaders.

"We've been working on a deal with Japan for a long time. And we've agreed in principle," Trump told members of the press pool covering his events, who were suddenly summoned to hear from him and Japanese Prime Minister Shinzo Abe.

U.S. officials said the deal involving agriculture, industrial tariffs and digital trade could be formalized before the United Nations General Assembly next month.

The Japanese described the deal more cautiously.

"We still have some remaining work that has to be done at the working level," Abe said, but he confirmed that his country planned to increase its purchases of U.S. corn.

Conversations with Iran have been a top sticking point during the G7 summit. French President Emmanuel Macron has been trying to defuse tensions with Iran, which have included the seizure of oil tankers in the Strait of Hormuz, but Trump made it clear that wasn't happening with his blessing.

"We'll do our own outreach," he said. "But you can't stop people from talking. If they want to talk, they can talk."

Zarif's arrival came hours after Trump seemed to express regret about the China trade war. Asked if he had second thoughts, Trump answered in the affirmative, a surprising admission for a president who has appeared allergic to self-doubt. Reporters asked a second time to ensure that Trump had heard the question correctly.

"Yeah, sure, why not?" he responded. "Might as well. Might as well. I have second thoughts about everything."

Trump went on to say that he had "no plans" for now to declare a national economic emergency that might allow him to punish U.S. companies that ignore his demand that they stop doing business in China. He also said he hadn't ruled out doing so if the situation deteriorated further.

On Friday, in a belligerent series of tweets that caused the stock market to nosedive, Trump "ordered" U.S. companies to start pulling operations out of China.

"If I want, I could declare a national emergency," he said Sunday. "I think when they steal and take out intellectual property theft _ anywhere from $300 billion to $500 billion a year _ and when we have a total loss of almost a trillion dollars a year, for many years this has been going on. And in many ways that's an emergency."

Trump added: "Actually we're getting along very well with China right now. We're talking. I think they want to make a deal much more than I do."

White House officials quickly tried to walk back Trump's comment on having "second thoughts." Press Secretary Stephanie Grisham said in a statement that Trump's answer had been "greatly misinterpreted."

"President Trump responded in the affirmative _ because he regrets not raising the tariffs higher," she said.

Larry Kudlow, a top economic advisor, offered a different explanation in an interview with CBS News. "He didn't quite hear the question this morning," Kudlow said, even though the president was asked twice.

Trump's remarks on trade with China came during a breakfast meeting with new British Prime Minister Boris Johnson, their first since Johnson's election as prime minister in July.

Trump praised the pro-Brexit leader as "the right man for the job" of finally engineering the U.K.'s separation from the European Union.

"I've been saying that for a long time," Trump said of Johnson, before a dig at former Prime Minster Theresa May. "Didn't make your predecessor very happy, but I've been saying that for a long time."

The two men also expressed confidence about a U.S.-U.K. trade deal coming together in the near future. But in a sign that Trump's policies have rattled even his closest allies on the world stage, Johnson gently expressed concerns about rising tariffs.

"Just to register the sheep-like note of our view on the trade war: We're in favor of trade peace on the whole," Johnson said. "We think that, on the whole, the U.K. has profited massively in the last 200 years from free trade, and that's what we want to see. So, that's what we're keen to see. We don't like tariffs on the whole."

Earlier on Sunday, Trump criticized the media for reporting on tensions with other world leaders.

"Such False and Inaccurate reporting thus far on the G-7," he tweeted. "The Fake News knows this but they can't help themselves!"

When planning the summit, Macron jettisoned plans for a traditional joint statement from the seven leaders, acknowledging that getting all of them on the same page as Trump would be difficult, if not impossible.

More rifts became evident during the weekend.

Administration officials were privately miffed on Saturday when Macron invited Trump to an unexpected lunch after his arrival at the summit, and they've accused him of trying to set an agenda _ which includes discussions about climate change and African development _ that doesn't focus enough on Trump's favored issue, international trade.

Then on Sunday, Trump and Abe showed they were out of sync on North Korea's continuing missile tests .

Abe called them a clear violation of United Nations resolutions, but Trump wouldn't go as far despite saying he was "not happy."

"I can understand how the prime minister of Japan feels," he said of short-range missiles that can't reach the United States but threaten Japan. North Korean leader Kim Jong Un had made a "personal" commitment to him not to test long-range missiles that potentially could hit the U.S. but hadn't said anything about short-range, Trump said.

"A lot of people are testing those missiles; not just him," Trump said. "A lot of people are testing those missiles. We're in the world of missiles, folks, whether you like it or not."

Trump has also pushed to re-admit Russia into the annual summit, turning the G7 back into the G8. Russia was kicked out in 2014 after its military took over Crimea, which was part of Ukraine.

"We have a number of people who would like to see Russia back," he said during the meeting with Abe. "I think it would be advantageous to many things in the world, I think it would be a positive. Other people agree with me, and it's something that we're discussing."

Trump, however, seemed to inch away from his original push _ "maybe we'll just leave it the way it is," he said _ and he declined to say which other leaders agreed with him. Several European leaders have publicly opposed the idea, and none have publicly supported it.

"I could, but I don't think it's necessary," he said.

Stokols reported from Biarritz, France, and Megerian from Washington.

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