The US-China trade war just took a surprising turn. Former President Donald Trump and Chinese President Xi Jinping had a “very good” phone call, rekindling trade negotiations that had stalled after a key May agreement. With both nations agreeing to new tariff talks, the call signals a potential thaw in their strained relationship.
Trump and Xi’s Phone Call: A Turning Point in the Trade War
Trump initiated the call, which lasted around 90 minutes and focused almost entirely on the US-China trade war. According to Trump, the conversation was productive and “very positive” for both sides. He emphasized that rare earth products are no longer a point of contention.
Xi’s Key Message: Stay the Course
President Xi urged the U.S. to “correct the course” of the US-China relationship. He highlighted the need to steer through interference and prevent conflict. Xi also warned that mishandling the Taiwan issue could lead to serious tension between the two nations.
Tariff Reductions Reignite Hope
In a surprising move, Trump announced a temporary 90-day reduction in tariffs:
- US tariffs on Chinese goods dropped from 145% to 30%
- China’s tariffs on US products fell from 125% to 10%
These cuts aim to give both sides breathing room to restart meaningful trade discussions.
Future Talks and Diplomatic Invitations
Both leaders expressed willingness to continue discussions. They even invited each other for official visits—a strong signal that diplomacy is back on the table.
While the conversation excluded topics like Russia, Ukraine, and Iran, it reaffirmed the importance of the US-China relationship, with Trump stating his “great respect” for Xi.
Why This Call Matters for Global Trade
This surprise development comes after months of tension that rattled global markets. With tariff reductions now in effect and talks resuming, businesses and investors worldwide may finally see some stability—at least for the next 90 days.
Previous Tensions Revisited
Just a day before the call, Trump said reaching a deal with Xi was “extremely difficult.” His Treasury Secretary, Scott Bessent, also noted that only direct dialogue between the two leaders could revive talks. This phone call appears to have done just that.
