WASHINGTON – In a move signaling a potential, albeit fragile, de-escalation of simmering trade tensions, US President Donald Trump and Chinese President Xi Jinping held a phone conversation on Thursday. The call, initiated by President Trump, marks the first known direct dialogue between the two leaders since Trump’s second inauguration and comes amidst renewed accusations of trade agreement violations.
Details of the conversation, which lasted approximately 90 minutes, were initially sparse, with Chinese state media Xinhua reporting the call took place at Trump’s request. However, subsequent posts by President Trump on his Truth Social platform shed more light on the discussion, stating it was “very good” and focused “almost entirely on TRADE.” He further indicated a “very positive conclusion for both Countries” and hinted at a resolution regarding the “complexity of Rare Earth products,” a critical point of contention in recent weeks.
This call follows a period of heightened friction. Just a day prior, Trump had posted on Truth Social, acknowledging his personal regard for President Xi but characterizing him as “very tough, and extremely hard to make a deal with!!!” This sentiment reflected the ongoing challenges in US-China trade relations, which saw a temporary truce in early May.
The Stalled Trade Truce
Earlier in May, US Treasury Secretary Scott Bessent had announced an agreement reached in Geneva for a bilateral reduction in tariffs. This 90-day deal saw the US agree to reduce tariffs on Chinese goods from 145 percent to 30 percent, while China committed to cutting tariffs on US goods from 125 percent to 10 percent. The agreement was seen as a significant step towards easing the tariff war that had escalated sharply since Trump’s return to office.
However, the “truce” proved short-lived. By May 30, Trump publicly accused China on Truth Social of “totally violat[ing] its agreement with us,” without specifying the breaches. China, in turn, denied these accusations and countered that the US had “severely violated” the deal, citing actions such as halting sales of computer chip design software and revoking Chinese student visas. This mutual recrimination had threatened to derail the fragile understanding reached in Geneva, bringing trade relations to a new precipice.
The Path Forward: Direct Engagement and Upcoming Talks
The phone call between Trump and Xi, therefore, represents a crucial attempt to pull back from the brink. Both leaders extended invitations for reciprocal visits, and Trump announced that their respective teams, including US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer, would meet “shortly” at an undisclosed location to work out further trade arrangements.
This direct engagement at the highest level underscores the belief in the Trump administration that leader-to-leader talks are essential to break the current deadlock. The complexities of rare earth minerals, a strategic resource vital for high-tech manufacturing, appear to have been a key focus, with Trump suggesting that “there should no longer be any questions respecting the complexity of Rare Earth products.”
While the details of the future negotiations remain to be seen, the phone call offers a glimmer of hope for stabilizing the volatile trade relationship between the world’s two largest economies. The global markets, which have reacted sensitively to every twist and turn in the US-China trade saga, will be closely watching the upcoming talks, hoping for a more sustainable resolution that avoids further disruption to global supply chains and economic stability. The conversation, though brief in its reported details, speaks volumes about the enduring necessity for dialogue, even amidst deep-seated economic and geopolitical rivalries.
