By David Harrison, Katy Stech Ferek and Andrew Restuccia 

WASHINGTON -- President Trump warned Chinese President Xi Jinping against reacting violently to protests in Hong Kong, saying that could threaten a trade deal, speaking hours after administration officials confirmed a new round of talks.

"It would be much harder for me to sign a deal if he did something violent in Hong Kong," the president told reporters Sunday evening in New Jersey before boarding a flight back to Washington, D.C. "I'd like to see that worked out in a humanitarian fashion."

The president's comments came as top advisers sought to put to rest fears that the two countries are on the brink of a prolonged trade war.

Over the weekend, administration officials said they would give Huawei Technologies Co. more time to work with U.S. customers and said the White House was laying the groundwork for a new round of trade talks with Chinese officials in Washington, D.C.

Those moves, combined with last Tuesday's delay in tariffs on $156 billion of Chinese goods, suggest an effort by the White House to dial back trade hostilities following a week of market swings. A 10% tariff on another $111 billion of imported goods will go into effect Sept. 1 as planned.

But Mr. Trump's comments indicate he is in no hurry to make a deal that might calm volatile markets and allay fears of a brewing recession. Mr. Trump appeared to back off from reports that the administration would grant a 90-day extension to the license that has allowed Huawei to do some business with the U.S. despite national-security concerns that landed the Chinese telecom company on an export blacklist in May.

"I'm making a decision tomorrow," he said. "Ultimately we don't want to do business with Huawei, for national security reasons."

Earlier Sunday, White House economic adviser Lawrence Kudlow said granting the company an extension would give American companies doing business with the Chinese telecommunications firm more time to make adjustments.

Mr. Trump declined to say whether he had spoken with Mr. Xi over the weekend and didn't lay out a timeline for when they might speak again. "I can speak to him any time," he said.

Mr. Trump dismissed fears of a recession, pointing to the strong labor market and robust consumer spending.

"We are doing better than any country or even area in the world," he said. "Our consumer is really, really strong."

Despite the president's optimism, concerns are mounting that a prolonged trade war and slowing global growth could inflict damage on the U.S. economy.

Although retail spending remained strong in July, U.S. consumer sentiment is slipping, falling to a seven-year low in August, according to an index published by the University of Michigan.

The outlook for businesses is more concerning. Corporate profits were down 2.2% in the first quarter versus the previous year and investment fell at a 0.6% annual rate in the second quarter, according to the Commerce Department. Elsewhere in the world, Germany's economy contracted for the second straight quarter and China reported lower than expected figures for factory production, consumption and property investment.

Mr. Trump suggested China was bearing the brunt of the pain from the tariffs, which would compel the country's leaders to strike a deal.

"China is doing very, very poorly," he said. "We're going to end up doing a very good deal and I think China, by the way, needs a deal much more than we do."

Mr. Trump also said Sunday he was evaluating the effects of tariffs on tech company Apple Inc., whose chief executive, Tim Cook, he had dinner with on Friday. The president said Mr. Cook told him that tariffs on imports from China give a competitive advantage to Apple rival Samsung Electronics Co. "And I thought he made a very compelling argument so I'm thinking about it," Mr. Trump said.

The vast bulk of Apple's products are made in China, while Samsung manufactures most of its goods elsewhere. Apple didn't immediately respond to requests for comment.

Earlier in the day, Mr. Kudlow said American and Chinese trade negotiators will be holding one or more teleconference calls in the next week or two to set ground rules and discuss topics for new high-level trade talks.

Those discussions will set the stage for Chinese officials to visit Washington, D.C., to resume negotiations.

"The talks are continuing," he said on NBC's Meet the Press. "Dialogue is a very good thing. How this turns out, I don't know. It is up to the president to judge the progress or lack thereof."

White House officials described last week's delay on some of the items set to be hit with new tariffs as a way to protect American companies that had already locked in dollar contracts with Chinese suppliers ahead of the holiday season.

The reprieve will postpone until Dec. 15 tariffs of 10% on smartphones, laptops, videogames, toys and other products that had been scheduled to take effect on Sept. 1.

The U.S. has already imposed 25% tariffs on about $250 billion of Chinese imports, mostly items used by businesses.

The delay sent stocks higher on Tuesday before they tumbled on Wednesday. The major trade indexes bounced back Thursday and Friday to close the week with a modest loss.

Write to David Harrison at david.harrison@wsj.com, Katy Stech Ferek at katherine.stech@wsj.com and Andrew Restuccia at Andrew.Restuccia@wsj.com

(END) Dow Jones Newswires

August 18, 2019 19:57 ET (23:57 GMT)