U.S. President Donald Trump and Chinese President Xi Jinping have agreed to launch a new round of high-level trade talks, marking a tentative step toward easing months of renewed economic tension that has unnerved global markets.
The announcement followed a phone call between the two leaders on Thursday — their first known conversation since Trump returned to the White House in January. Speaking from the Oval Office, Trump described the exchange as “very good,” and said the two countries had “straightened out any complexity,” in what he called “very complex stuff.”
“I think we’re in very good shape with China and the trade deal,” Trump said. The renewed dialogue follows escalating disputes over rare earth exports and tech restrictions, which had threatened to unravel the fragile Geneva agreement reached last month.
In a message posted earlier on Truth Social, Trump emphasized that “there should no longer be any questions respecting the complexity of Rare Earth products,” suggesting rare earth materials — critical for advanced electronics, defense systems, and green technologies — were a central topic in the leaders’ discussion.
The Financial Times reported that tensions had flared recently after Washington accused Beijing of stalling on export licenses for rare earth materials, leading to critical shortages in U.S. industry. China, in turn, accused the U.S. of violating the Geneva deal through continued restrictions on Chinese technology firms and by revoking student visas.
Chinese state news agency Xinhua quoted Xi as telling Trump that Beijing had strictly adhered to the Geneva agreement and urged the U.S. to recognize the progress made “in a realistic way” while removing “negative measures” against Chinese companies. “The Chinese people always keep their promises,” Xi said, adding that both sides must honor the consensus they had reached.
As part of the renewed engagement, Trump confirmed that high-level economic talks would begin soon, led by U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer. Trump also revealed that Xi had invited him to China and that he had “reciprocated” the invitation, saying both men looked forward to the visits.
Last month’s Geneva truce had temporarily paused tit-for-tat tariffs — some of which had soared to 145% — and resumed the flow of Chinese rare earths to the U.S. But fragile progress was tested last week when Washington issued new warnings against using Huawei chips and blocked the sale of chip-design software to Chinese firms.
While Trump has frequently touted his personal rapport with Xi as a stabilizing force, he had just a day earlier described the Chinese leader as “extremely hard to make a deal with.” Yet Thursday’s call suggested a mutual willingness to keep economic relations on track, even as broader geopolitical tensions — including those surrounding Ukraine and Iran — remain unresolved. Trump confirmed these issues were not discussed in the call.
The renewed outreach comes as China grapples with an economic slowdown, persistent deflation, and high youth unemployment. At the same time, a surge in low-cost Chinese exports and rapid growth in sectors like artificial intelligence has rattled some of its trading partners.
Investors are closely watching whether the new round of talks will prevent a fresh escalation of the trade war. Global markets, which had stabilized after the Geneva truce, could be vulnerable to renewed volatility if progress stalls.
The Trump-Xi call came on the eve of Trump’s meeting with German Chancellor Friedrich Merz at the White House, where U.S.-EU trade tensions are expected to dominate. Trump has threatened to impose 50% tariffs on EU imports starting July 9 if a new trade agreement is not reached — a sign that Washington’s aggressive trade posture may extend beyond Beijing.
