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By Susan Heavey, Doina Chiacu and Joe Cash WASHINGTON/BEIJING (Reuters) -U.S. President Donald Trump remains on track to meet Chinese leader Xi Jinping in South Korea in late October, U.S. Treasury Secretary Scott Bessent said, as both sides looked to ease tensions following fresh tariff threats and export controls. A return to an all-out trade war between the world's two largest economies appeared imminent late last week, after China announced on Thursday a major expansion of its rare earths export controls. Trump responded on Friday by threatening to raise tariffs on Chinese goods to triple-digits, sending markets and U.S.-China relations into a tailspin. But after the weekend, Bessent and China's Commerce Ministry sought to reassure traders and investors on both sides of the Pacific, highlighting the cooperation between their negotiating teams and the possibility they could find a way forward from the current tariff truce. The language in statements from both sides remains tough, however. "We have substantially de-escalated," Bessent said in an interview with Fox Business Network on Monday. Substantial communications between the two sides had taken place over the weekend and there would be U.S.-China staff-level meetings this week in Washington on the sidelines of the World Bank and International Monetary Fund annual gatherings, he added. "The 100% tariff does not have to happen," Bessent said. "The relationship, despite this announcement last week, is good. Lines of communication have reopened, so we'll see where it goes." "President Trump said that the tariffs would not go into effect until November 1. He will be meeting with Party Chair Xi in Korea. I believe that meeting will still be on." Trump and Xi had planned to meet during the summit of the Asia-Pacific Economic Cooperation forum hosted by South Korea in late October. In a statement on Tuesday, China's Commerce Ministry confirmed that a working-level meeting had taken place the previous day, while highlighting earlier formal negotiations held in London, Stockholm and Madrid, culminating in a 90-day tariff extension. But the statement from a Commerce Ministry spokesperson warned "the U.S. cannot ask for talks while simultaneously threatening new restrictive measures." Over the weekend, officials from both sides looked to shift the blame for risking a renewed trade war onto each other. U.S. Trade Representative Jamieson Greer said on Sunday that China had deferred Washington's request for a phone call following Beijing's rare earths announcement, calling the move a "power grab." That same day, China's Commerce Ministry criticised the addition of Chinese companies to a U.S. trade blacklist and the imposition of port fees on China-linked ships. Wall Street's main indexes ended as much as 2.2% higher on Monday, following Bessent's signal that trade negotiations between the two superpowers remain on track, and Asian stocks made a tentative rebound in early trade on Tuesday. Markets shrugged off the U.S. and China sticking with retaliatory port fees, with shares of Chinese shipping giant COSCO – likely the most affected firm – rising more than 2% in Shanghai to a three-week high, buoyed by a share buyback plan. BOTH SIDES READY FOR A FIGHT Both sides remain ready for a fight, however, accusing each other of attempting to derail the global economy. "China is a command-and-control economy. They are neither going to command nor control us," Bessent said, adding that the White House had been in contact with allies and expects support from the Europeans, India and democracies in Asia. Meanwhile, Beijing said it sought to "jointly maintain the security and stability of global production and supply chains," defending its new export licensing regime. Some analysts say the new regime could affect the manufacture of everything from cars to washing machines, even when no Chinese companies are involved in the final product. The U.S. would reject licensing requirements from China, Bessent said in the interview on "Mornings with Maria." "China's position is consistent: if the U.S. wants a fight, China will respond to the end. If it wants to talk, China's door is open," the Commerce Ministry's statement said, before softening to focus on the prospect of Xi and Trump reaching a breakthrough. "Guided by the important consensus reached in the recent call between the two presidents, both sides should safeguard the hard-won progress of consultations," the statement concluded. (Reporting by Susan Heavey, Doina Chiacu, David Lawder and Joe Cash in Beijing; Writing by Doina Chiacu and Joe Cash; Editing by Hugh Lawson, Alistair Bell and Lincoln Feast)

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BENGALURU (Reuters) -Google will invest $15 billion over the next five years to set up data centre capacity for an artificial intelligence hub in India's Andhra Pradesh, the company said on Tuesday, marking one of its biggest ever investments in the country. "It's the largest AI hub that we are going to be investing in anywhere in the world outside of the U.S.," Google Cloud CEO Thomas Kurian said at a New Delhi event. The 1-gigawatt data centre campus by the Alphabet Inc unit will be based in the port city of Visakhapatnam. Officials from the southern Indian state earlier put the investment at $10 billion. The move comes amid intensifying competition among big tech companies, which are spending heavily on building new data centre infrastructure to meet booming demand for AI services. Google alone has committed to spending some $85 billion this year to build out data centre capacity. AI requires enormous computing power, pushing demand for specialized data centers that enable tech companies to link thousands of chips together in clusters. Microsoft and Amazon have already poured billions into building data centres in India, a key growth market for the global tech giants where nearly a billion users access the internet. Reuters first reported about Google's plans in July. The search giant's data centre will be the largest in capacity and investment size in Asia, and is part of a multi-billion-dollar expansion of its data centre portfolio across the region in countries including Singapore, Malaysia and Thailand, Reuters reported at the time. "In an era where data is the new oil, such initiatives will serve as a strategic advantage," state IT Minister Nara Lokesh said. (Reporting by Munsif Vengattil in Bengaluru and Sarita Chaganti Singh in New Delhi; Editing by Himani Sarkar and Lincoln Feast.)

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BERLIN (Reuters) -German inflation rose slightly in September to 2.4%, the federal statistics office said on Thursday, confirming preliminary data. Inflation, or consumer prices harmonised to compare with other European Union countries, stood at 2.1% year-on-year in August. The statistics office gives more detailed monthly data on its website. (Reporting by Friederike Heine, editing by Ludwig Burger)

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By Rae Wee SINGAPORE (Reuters) -A rebound in the dollar proved short-lived on Tuesday following renewed signs of strains in U.S.-China trade relations, which dented risk sentiment and left investors ducking for cover in traditional safe havens like the yen and the Swiss franc. Just as markets found some reprieve after U.S. President Donald Trump struck a more conciliatory tone against tariffs on China, and on signs that a meeting with his Chinese counterpart was on track for later this month, developments on Tuesday served as a stark reminder that ties between the two nations remain on thin ice. Beijing announced that it has taken countermeasures against five U.S.-linked subsidiaries of South Korean shipbuilding firm Hanwha Ocean and separately said it has launched an investigation into how a U.S. Section 301 probe affects its domestic shipping industry. Adding to tensions, the United States and China on Tuesday will begin charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil. All that sent the dollar sliding broadly, reversing its gains from earlier in the session. The euro edged 0.14% higher against a weaker greenback to $1.1585, while sterling was up 0.12% to $1.3351. The Australian dollar, often used as a proxy for risk appetite, suffered heavy losses to last trade 0.63% lower at $0.6475. The New Zealand dollar fell 0.5% to $0.5697. "Beijing has been quite clear, they want negotiations and they want a relationship that's based on mutual respect and something that's going to be driven by a fair basis," said Vishnu Varathan, Mizuho's head of macro research for Asia ex-Japan. "There's a clear case to be made that this is not going to end just because parties have met to speak, because the underlying source of tensions… cannot be resolved until and unless someone concedes far more than they're willing to. "This U.S.-China state of affairs is not a cyclical thing. It's a structural feature of the new geoeconomic realities, and that's just what it is." China's commerce ministry also said on Tuesday that it had informed the U.S. about the rare earth export controls Beijing announced last week prior to their introduction, adding that working-level talks between the two sides took place on Monday. Safe-haven currencies like the yen and the Swiss franc meanwhile made steady gains. Against the dollar, the Swissie was up 0.2% to 0.8027, while the yen reversed early losses to stand 0.3% higher at 151.86. Still, lingering political uncertainty in Japan capped the yen's gains, after Sanae Takaichi's bid to become the nation's first female prime minister was thrown into doubt on Friday when her ruling party's junior coalition partner quit. While the move halted the currency's steep slide as investors assessed the chances of huge fiscal largesse under the new premiership, it continues to languish near eight-month lows. "If you ask me, given the current interest rate differential between the U.S. and Japan, which should be the primary driver of the exchange rate as well, dollar/yen should not be at 152, so I do expect this trend to reverse pretty soon," said Nigel Foo, head of Asian fixed income at First Sentier Investors, who expects the yen to strengthen eventually. Elsewhere, cryptocurrencies were similarly caught in the broad selloff in risk assets, with bitcoin slumping 2.7% to $112,714.58. Ether tumbled 4.9% to $4,077.79. Market participants said the crypto sector on Friday saw more than $19 billion in liquidations across leveraged positions as panic selling and low liquidity triggered sharp swings. (Reporting by Rae Wee; Editing by Shri Navaratnam and Kim Coghill)

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