In a significant development in the ongoing US-China trade war, President Donald Trump and Chinese President Xi Jinping held a 90-minute call on Thursday, agreeing to restart tariff negotiations between the two countries. The call, which Trump described as "very good" and "almost entirely" focused on trade, has raised hopes of a potential breakthrough in the long-standing trade impasse between the world's two largest economies. According to Trump, the conversation resulted in a "very positive conclusion for both Countries," and US officials, including Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer, will soon meet with their Chinese counterparts to resume trade talks.
The trade war between the US and China has been escalating for months, with both countries imposing steep tariffs on each other's goods. The Trump administration has accused China of unfair trade practices, including intellectual property theft and forced technology transfer, while China has retaliated with its own tariffs on US goods. The situation took a turn for the worse in recent weeks, with the US imposing new restrictions on Chinese student visas and issuing an industry warning against using Chinese semiconductors. China has expressed deep frustration with these moves, accusing the Trump administration of undermining recent trade progress. Despite these tensions, Thursday's call between Trump and Xi has raised hopes of a potential thaw in relations.
The US and China have a complex and intertwined trade relationship, with bilateral trade totaling nearly $600 billion in 2024. The trade war has had a significant impact on both countries, with US farmers and manufacturers feeling the pain of Chinese tariffs, and Chinese companies struggling to cope with US restrictions. The Trump administration has been seeking to renegotiate the trade relationship with China, with a focus on reducing the US trade deficit and increasing Chinese imports of US goods. China, on the other hand, has been seeking to protect its own economic interests and maintain its position as a major player in global trade. The restart of tariff negotiations is a significant development, and it remains to be seen whether the two countries can reach a mutually beneficial agreement.
The call between Trump and Xi was only the second time this year that the two leaders have held a one-on-one conversation. Trump has been eager to speak with Xi, and the call was seen as a positive development by markets, with stocks seeing a brief rally on the news. However, the road ahead is likely to be challenging, with significant differences remaining between the two countries on issues such as trade, security, and human rights. The US has also been critical of China's actions in the South China Sea and its treatment of minority groups in Xinjiang. Despite these challenges, the restart of tariff negotiations is a significant step forward, and it raises hopes of a potential breakthrough in the US-China trade war.
The implications of the US-China trade war are far-reaching, with the potential to impact not just the two countries but also the global economy. A prolonged trade war could lead to higher prices, reduced economic growth, and increased uncertainty for businesses and investors. On the other hand, a successful negotiation could lead to increased trade, investment, and cooperation between the two countries, with benefits for both the US and Chinese economies. As the tariff negotiations resume, all eyes will be on the progress made by the two countries, and the potential for a breakthrough in the US-China trade war. With the US presidential election looming, the outcome of these negotiations could have significant implications for Trump's trade policy and his legacy as a deal-maker.