This year's G7 summit is bringing together the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, and U.S.in Biarritz, where they are discussing tackling inequality, economic, environmental, and foreign policy issues.
President Macron has made restarting negotiations with Tehran a priority at this weekend's G7 summit.
He also said he would hold off for now on declaring a national emergency which would allow him to invoke an obscure law that he says gives him the power to order United States companies out of China.
But Trump said he has "no plans right now" to use a national security law he mentioned last week to declare an emergency and force USA companies to leave China.
"Do you have second thoughts about escalating the war with China?" one reporter asked.
Hours later, the White House backpedaled.
Leaping into the fray, European Council President Donald Tusk, who takes part in the G7 discussions, warned the EU would respond "in kind" if Trump acted on his threat.
White House economic adviser Larry Kudlow offered a different explanation when interviewed Sunday by CBS' "Face the Nation", saying Trump "didn't quite hear the question".
Trump arrived in Biarritz fresh from having drastically upped the ante in the trade war with China. But he chided Trump on his unbending China policy. But the later reversal fit a pattern for Trump in recoiling from statements he believes suggest weakness.
USA authorities earlier this month placed Zarif under US sanctions.
Trump had been trying to use the summit to rally the other leaders to do more to stimulate their economies, as fears rise of a potential slowdown in the U.S.
Einar Tangen, China political and economic analyst. Sitting across from Trump on Sunday, he said: "We're in favor of trade peace on the whole, and dialing it down if we can".
"In Japan we are now experiencing inspect pest on some of the agricultural products", Abe said.
"Are you going to declare a national emergency on China?" the reporter asked. He cited China's theft of intellectual property and the large USA trade deficit with China, saying "in many ways that's an emergency".
Lowered expectations are nothing new for the G-7, but this year's intent seems to be just to avoid diplomatic catastrophe, salvage the possible, and show voters that their leaders have a role on the world stage.
"No meeting or negotiations will be held with the US delegation" during Zarif's trip to the French town, said Mousavi.
Robert Malley, head of the International Crisis Group, a think-tank, said that it was a sign that Trump had given "some positive response" to Macron's proposals for a deal.
Trump also appeared at odds with Japanese Prime Minister Shinzo Abe over the seriousness of North Korea's series of short-range missile launches.
In a Sunday morning tweet Trump says "the Leaders are getting along very well".
This is seen as a first step to get Iran back to the negotiating table, which could then lead to a new worldwide agreement to limit its nuclear programme.
"But worth trying", the American-educated Zarif wrote on Twitter after meeting Macron and French Foreign Minister Jean-Yves Le Drian as well as British and German officials.
Trump curtly told reporters he had "no comment" on Zarif's presence.
Talks between Washington and Beijing on ending what Mr Trump says is a massively unfair trade relationship have hit a brick wall.
And, sitting feet away from Abe, Trump declined to forcefully condemn North Korea's flouting of global sanctions with a recent burst of short-range ballistic missile tests, calling them "much more standard" missiles.
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