WASHINGTON: US President Donald Trump and Chinese President Xi Jinping spoke Thursday (June 5), according to China’s Foreign Ministry, as trade tensions roil relations between the world’s two largest economies.
Relations between the two rivals have soured in recent weeks, with both sides accusing the other of violating a trade truce that brought down tariffs from massive highs.
With the fresh conflict threatening the fragile détente, market analysts were hopeful the conversation would pave the way to a trade off-ramp. Stocks rose on news of the call, with the S&P 500 extending gains into a fourth straight day.
The phone call between the leaders marks their first known formal contact since Trump took office. The last conversation between Trump and Xi took place in January before the US president’s inauguration.
The Chinese Foreign Ministry said the call was initiated at Trump’s request. The White House did not immediately respond to a request for comment.
Rare earths have emerged in recent days as a key flashpoint. The US has accused China of reneging on a promise to relax export controls on such metals needed for cutting-edge electronics.
Beijing has been frustrated by fresh US restrictions on the sale of chip design software and plans to start revoking visas for Chinese students.
Trump has long said direct talks with Xi were the only way to resolve differences between the nations, but the Chinese leader had thus far been reluctant to get on the phone with his American counterpart - preferring that advisers negotiate key issues.
Export controls and US actions on student visas and technology curbs will likely be central to future negotiations.
US and Chinese trade chiefs only agreed in Geneva last month to lower tariffs for 90 days, as they worked toward a broader deal.
History suggests that any final deal could be a long time coming.
In 2018 during Trump’s first term as president, the two sides agreed to put their dispute "on hold” after a round of negotiations, but the US soon backed away from that deal, leading to more than 18 months of further tariffs and talks before the signing of the "Phase One” deal in January 2020.
One goal for China this time around will be seeking relief from US export controls on cutting-edge chips vital for AI and military advancement.
That’s likely to be a sticking point in Washington, with both Democrats and Republicans in rare agreement that Beijing poses a national security threat.
Beyond strains in economic ties, geopolitical frictions are also growing. Foreign Ministry officials this month protested US Defence Secretary Pete Hegseth’s assertion at a gathering of military chiefs in Singapore that China poses an imminent threat to Taiwan, a self-ruled island claimed by Beijing. - Bloomberg
