In a rare direct call, U.S. President Donald Trump and Chinese leader Xi Jinping addressed escalating trade tensions and a critical minerals dispute that threatens global supply chains. The hour-long conversation, which touched on tariffs, rare earth exports.

U.S. President Donald Trump and Chinese leader Xi Jinping addressed rising trade tensions and a deepening dispute over critical minerals in a rare leader-to-leader phone call on Thursday. The more-than-one-hour-long conversation came at a crucial time, as both sides attempt to stabilize a fragile truce in their ongoing trade war.

According to a Chinese government summary, President Xi urged Trump to ease U.S. trade measures that have impacted the global economy and warned against further provocations on Taiwan. Meanwhile, Trump described the conversation as “very positive,” stating on social media that the talks focused primarily on trade and would be followed by lower-level discussions.

“There should no longer be any questions respecting the complexity of Rare Earth products,” Trump posted, without elaborating on any specific agreement.

He later told reporters:

“We’re in very good shape with China and the trade deal.”

Both leaders also extended invitations to visit each other’s countries.

Rare Earths at the Center of the Dispute

The call comes amid growing concerns over China’s April decision to suspend exports of key critical minerals and rare earth magnets. These materials are essential for electric vehicles, semiconductor production, and military technology. The export controls have disrupted global supply chains and are seen as a strategic move by Beijing to apply pressure on Washington.

The rare earth issue remains unresolved, as neither side provided details on how—or if—it was addressed during the call.

Trump announced that a U.S. delegation, including Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer, will meet with their Chinese counterparts “shortly at a location to be determined.”

Fragile Truce and Broader Issues

The two countries agreed on May 12 to a 90-day truce aimed at rolling back some of the tariffs imposed since Trump returned to office in January. However, this temporary agreement has not resolved deeper disputes, including those over Taiwan, China’s state-driven economic model, and the illicit fentanyl trade.

Although U.S. markets reacted positively to the news, with major indexes climbing on Thursday, investors remain cautious. The unpredictable nature of Trump’s trade approach—often announcing punitive measures and then reversing them—has left global markets on edge.

Despite the truce, tensions have persisted. Trump has accused China of violating the agreement and has introduced new restrictions on exports of chip-design software and other high-tech tools. Beijing has rejected the accusations and warned of countermeasures.

“The U.S. side should take a realistic view of the progress made and withdraw the negative measures imposed on China,” China’s government said in a statement summarizing Xi’s remarks during the call, as reported by Xinhua.

Xi also emphasized that the United States should handle the Taiwan issue "prudently."

Leadership Dynamics and Diplomatic Challenges

Trump has long emphasized the importance of direct talks with Xi to break through bureaucratic deadlocks in trade negotiations. While his administration favors top-level engagement, China traditionally prefers to finalize agreements at the working level before escalating to leaders.

Thursday’s call reportedly came at Trump’s request. It is unclear when the two leaders last spoke. While the U.S. side has claimed several interactions since Trump’s return to office on January 20, China has previously stated that no recent calls had taken place.

The two leaders have met in person several times, including during mutual state visits in 2017. However, their last face-to-face meeting occurred at the G20 summit in Osaka, Japan, in 2019.

Xi last visited the U.S. in November 2023 for a summit with then-President Joe Biden. That meeting led to agreements on resuming military communications and combating the production of fentanyl—a key concern in U.S.-China relations.

Outlook: Fragile Calm, Lingering Uncertainty

As the world’s two largest economies continue to navigate a tense and complex relationship, business leaders and global markets are watching closely. With the holiday shopping season approaching and litigation over tariffs still pending in U.S. courts, the stakes are high.

Whether Thursday’s call marks a meaningful turning point or simply a pause in a larger confrontation remains to be seen. For now, both sides appear willing to keep talking—even if many of the thorniest issues remain unresolved.

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