Trump and Xi Jinping Reignite Trade Talks with ‘Very Good’ Phone Call

US-China leaders agree to resume negotiations after tariff pause and diplomatic stall

Trade Talks Resume After May Agreement Stalls

Trade tensions between the United States and China could be easing, following what President Donald Trump described as a “very good” phone call with Chinese President Xi Jinping. The call comes after negotiations stalled in May despite an earlier agreement to reduce tariffs on goods from both nations.

The 12 May trade truce had paused some tariffs while negotiations continued, but progress slowed shortly after. This latest high-level conversation marks a renewed effort to get discussions back on track.

Trump Initiated the Call, Xi Urges Steady Leadership

Chinese state media confirmed that Mr Trump initiated the call, which lasted approximately 90 minutes. According to the readout, the US president and Mr Xi focused “almost entirely on trade”, with no discussion on Russia, Ukraine, or Iran.

On his Truth Social platform, Mr Trump stated:

“I just concluded a very good phone call with President Xi of China... It resulted in a very positive conclusion for both countries.”

Mr Xi reportedly used the conversation to urge calm and focus, saying:

“It is especially important to correct the course of the big ship of China–US relations... and to remove interference and sabotage.”

Key Issues: Tariffs, Rare Earths, and Taiwan

One of the more specific outcomes from the call was Mr Trump’s statement that there should be “no more questions” around rare earth exports, which are vital for various tech and defence industries.

However, tensions over Taiwan were also addressed, with President Xi warning the US to handle the matter carefully to avoid sparking confrontation.

Despite this, both sides agreed to resume formal tariff talks, and invitations were extended for future diplomatic visits between the two countries.

Tariff Reductions Temporarily Ease Trade Tensions

Ahead of the call, President Trump reduced tariffs on Chinese imports from 145% to 30% for 90 days, offering a window for negotiations. China reciprocated, cutting duties on US goods from 125% to 10%.

The move is designed to create space for a comprehensive trade agreement, although market analysts remain cautious given past volatility.

Trump’s Tough Stance Softens Slightly

Although Mr Trump has previously labelled Xi “very tough” and “hard to make a deal with”, he used more diplomatic language during this exchange.

“I like President Xi of China, always have, and always will,” he posted. “But he is extremely tough.”

Earlier in the week, Treasury Secretary Scott Bessent suggested that only a direct conversation between the two leaders could break the impasse and restart meaningful discussions.

Impact on Global Markets and Investor Sentiment

The revived talks have been welcomed by global markets, which have seen sharp swings during the course of the US-China trade war. Investors will be watching closely for any signs of real progress, especially as the temporary tariff reduction period is time-limited.

A stable resolution could ease pressure on supply chains, global trade flows, and commodity prices, which have all been impacted by the prolonged economic dispute.

Conclusion: A Cautious Step Forward

While the phone call between Trump and Xi doesn’t guarantee a breakthrough, it is a critical step toward resuming formal trade negotiations. With both sides showing a willingness to engage—and temporary tariff reductions in place—the next few weeks could prove decisive for the future of US-China trade relations.

Sources: (Investing.com, Reuters)