WASHINGTON (NEXSTAR) – The tariff battle between the U.S. and China rages on following President Donald Trump’s call with President Xi Jinping Thursday morning. 

The world’s two largest economies have traded barbs over their temporary agreement on imports, but President Trump insists a deal is imminent. 

“We had a very good talk,” President Trump said in the Oval Office Thursday. “We’re in very good shape with China and the trade deal.”

The U.S. and China escalated their trade tensions with more than 100% tariffs on each other’s imports before agreeing to significantly lower those percentages while they negotiate a permanent deal.

“It’s very complex stuff, and we straightened it out,” President Trump said. 

President Trump said they reached an agreement on Chinese exports that are critical for U.S. car manufacturers.

“Having to do mostly with rare earth magnets and some other things,” he said.

This week, President Trump also doubled tariffs on steel and aluminum from 25-50%, which also impacts China.

“They’re crushing our industry, trying to put us out of that business,” Commerce Secretary Howard Lutnick said Thursday during a House committee hearing over his department’s budget. 

Lutnick defended that tariff increase and will be one of the lead negotiators in upcoming talks with China.

“We open those markets, America will flourish,” he said. 

U.S. Rep. Frank Mrvan (D-Ind.) told Lutnick he supports boosting domestic manufacturing but stressed that takes time.

“What is the plan to make sure that those individuals who work in those plants that are downstream of the steel industries are going to be protected?” Mrvan asked. 

A new Commerce Department report shows the U.S. trade deficit narrowed by nearly 56 percent from March to April.

President Trump said he and Xi also accepted each other’s invitations for official state visits but did not say when the trips would happen.