A former top U.S. trade negotiator said talks with China for a trade deal had made significant progress despite recent setbacks and an agreement would eventually be reached.

China could retaliate against the U.S. after President Donald Trump blacklisted Huawei Technologies Co., the Chinese ambassador to the European Union said.

The U.S. government on Monday temporarily eased some trade restrictions imposed last week on China’s Huawei, a move that sought to minimize disruption for the telecom company’s customers around the world.

Worries that the United States and China were digging in for a longer, costlier trade war weighed on financial markets on Monday as Beijing accused Washington of harboring “extravagant expectations” for a deal to end their dispute.

While China’s Belt and Road Initiative offers a solution to problems that require international assistance to address, this is not Beijing’s altruism at work. The BRI is still a money-making investment and an opportunity for China to increase its connectivity throughout the globe.

“China is obviously not doing well like us.”

Over the last month the U.S.-China trade war has boosted the risk of a U.S. recession, say a strong majority of economists polled by Reuters, who now put the chances of that happening in the next two years at 40%.

Late last month at a security forum in Washington, DC, Kiron Skinner, Director of Policy Planning for the US Department of State, described today’s US-China conflict as “a fight with a really different civilization and a different ideology, and the United States hasn’t had that before.” As a trial balloon, this apparent attempt to define the Trump administration’s confrontation with China did not fly.