The two leaders addressed US-EU trade negotiations, the escalating trade dispute between Beijing and Washington, and Iran.
German Chancellor Angela Merkel and US President Donald Trump held a press conference on Monday as they sat down for bilateral talks at the G7 in Biarritz.
Read more: G7 in Biarritz: Second-day takeaways
The two leaders addressed US-EU trade negotiations, the escalating US-China trade dispute and Iran, among other issues.
US-Europe trade deal
Merkel said she hoped the European Union would reach a trade deal with the United States as soon as possible.
Trump said the two had discussed a trade deal with the European Union and that he hoped Washington would not have to consider imposing tariffs on German car exports.
Read more: G7 in Biarritz: First-day takeaways
However, he again characterized Europe's trading practices as unfair and claimed the United States had lost a lot of money.
Merkel said a EU-US trade deal was in their mutual interest.
"We have a great interest in our trade being intensified. I think we can find solutions," Merkel added. "Germany, within the framework of the EU, is working hard on this."
It was all smiles and pomp between Merkel and Trump in front of the cameras. Behind closed doors the two countries are discussing several serious disagreements.
US-China trade spat
An intensifying trade dispute between Beijing and Washington has sounded alarm bells in Europe amid concern it could tip an already weakening global economy into recession.
Shortly before meeting Merkel, Trump said that the United States and China will begin serious negotiations soon.
Merkel said that she would be pleased if Beijing and Washington overcame their differences because it was also in Germany's interest.
Surprise visit from Iran
Trump claimed there was "great unity" among G7 leaders on Iran and they had "more or less" come to a conclusion.
The statement came a day after Iranian Foreign Minster Mohammad Javad Zarif made a surprise visit to the summit at the invitation of French President Emmanuel Macron.
France is attempting to cool tensions in the Persian Gulf and get the United States and Iran back to the negotiating table after Trump unilaterally withdrew from the 2015 nuclear deal and reimposed sanctions on Tehran. The move has caused tensions between Europe and the United States.
Merkel said she and Trump had productive talks but there was still a long way to go on the Iran issue.
Captured 'Islamic State' fighters
Trump said he has raised the issue with G7 leaders that countries take back foreign "Islamic State" fighters captured by US-backed forces in Syria and Iraq.
He said it was unfair for the US to hold hundreds of foreign fighters in Syria. He said many came from Europe — including Germany — and that he wanted the fighters repatriated.
Merkel noted that Germany has repatriated some IS wives and children.
cw/rc (Reuters, dpa)