US President Donald Trump on Monday toned down talk of a trade war with China by indicating that a deal could be reached.

"We have a very good relationship with China, and I think we will maintain that relationship," Trump said during a White House Cabinet meeting with reporters present. "When we do a deal with China, which, probably, we will - if we don't, they'll have to pay pretty high taxes to do business with our country. That's a possibility."

But he also said "it takes a while to get there, but it could be very quick", adding that he does not blame China, but rather his predecessors and former US representatives and negotiators.

Trump repeated what he has said and tweeted many times before: that he has great respect for President Xi Jinping and considers China's president a good friend.

He described his two days in Beijing last November and Xi's two days at Mar-a-Lago in Florida in April 2017 as "four great days".

The words were in stark contrast to his tough rhetoric in issuing a surprising statement last Thursday instructing US Trade Representative Bob Lighthizer to consider whether $100 billion of additional tariffs on China would be appropriate.

The move was in response to China's fresh retaliation against proposed US Section 301 tariffs on 1,300 Chinese products worth $50 billion.

Larry Kudlow, director of the White House National Economic Council, reiterated on Monday that no tariffs were enacted yet and discussions are ongoing.

"That's up to the president. The president will make the decision. He said to me, 'Tariffs are part of the discussions,'" Kudlow said when asked if the proposed levies will take effect and spark a trade war.

The US stock market rallied most of Monday when concerns about a trade war were eased. But much of the day's gains were depleted after news reports saying that the Federal Bureau of Investigation raided the office of Trump's personal lawyer Michael Cohen in New York.

The Dow Jones Industrial Average closed up 46.34 points or 0.2 percent to 23,797, while the S&P 500 gained 8.69 points, or 0.3 percent to 2,613. The Nasdaq Composite index closed at 6950.34, up 35.23 points, or 0.51 percent.

US lawmakers are returning to Washington this week after recess. Both the Senate and House have scheduled hearings on Wednesday and Thursday, respectively, on trade with China.

Many lawmakers, mostly from the Republican Party, have voiced concerns about the negative impact on local and state economies and possibly the midterm elections due to a potential trade war or tit-for-tat tariff actions with China and other countries.

Trump on Monday also blamed the European Union, South Korea and the US' two NAFTA partners, Mexico and Canada, for what he called unfair trade deals, saying "we essentially have bad deals with everyone".

Idaho Governor Butch Otter on Monday said "there is probably saber-rattling going on there" when describing the climate in Washington.

Trump tweeted early Monday morning about the difference of car tariffs imposed by China at 25 percent and by the US at 2.5 percent, calling it "stupid trade".

China exported 53,000 cars to the US in 2017, while the US exported more than 267,000 new passenger vehicles and light trucks to China in 2017.

General Motors alone sold more than 4 million cars in China in 2017, mostly made in China. It was more than its sales volume in the US.

Despite the Trump team's softening of its rhetoric, Chinese Foreign Ministry spokesman Geng Shuang said on Monday that financial and economic officials from the two countries have not conducted any negotiations on trade issues.

"Under the current circumstances, it is even more impossible for the two sides to do so," Geng said in Beijing.

China has long called for talks to resolve bilateral trade issues but has expressed deep frustration over the Trump administration's unilateral actions, under both Section 301 of the US Trade Act of 1974 on China's intellectual property policies and practices and Section 232 of the Trade Expansion Act of 1962 on the national security threat posed by steel and aluminum imports.

Geng said the US shall "entertain no illusion" and "we are confident that we are going to have the last laugh".

Gary Locke, former US commerce secretary and former US ambassador to China, said on Monday on CNBC that he does not believe tariffs are the way to address issues that the US has with China.

"If we have a trade war, I really believe that China has more tools at its disposal that will ultimately hurt American companies and American consumers more than it would hurt Chinese companies and Chinese consumers," he said.

Ruan Zongze, executive vice-president of the China Institute of International Studies, a think tank under China's Ministry of Foreign Affairs, said, "Washington underestimated the Chinese resolve and determination," citing China's immediate response to US tariffs the past week.

He told media at the Chinese embassy in Washington on Monday that the US has overestimated two things: the trade deficits and forced technology transfers.

According to Ruan, Chinese laws do not require technology transfers by foreign companies operating in China. He said the joint venture requirements in certain sectors are in line with World Trade Organization rules and norms, and there is no government intervention when Chinese and foreign companies engage in technology cooperation.

It is on a "voluntary basis", he said.