President Donald Trump announced on Thursday that senior U.S. trade officials will soon convene with their Chinese counterparts, marking a fresh effort to resolve lingering commercial disputes. The announcement follows a 90-minute phone conversation between Trump and Chinese President Xi Jinping, their first one-on-one call since Trump’s return to the White House. With presidential envoys set to meet at a date and location to be determined, both sides aim to navigate a tangled web of tariffs, export controls, and strategic resources—most notably rare earth minerals—while calming global financial markets unsettled by their ongoing trade tensions.

Details of the Call and Top-Level Invitations

Trump described his conversation with Xi as “very good” and “almost entirely focused on trade,” a sign that economic issues now dominate the bilateral agenda. In a post on his social media platform, Trump emphasized that the call produced “a very positive conclusion for both countries.” He revealed that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative Jamieson Greer will lead the American delegation at the forthcoming trade talks. Xi, for his part, extended a formal invitation to Trump and First Lady Melania Trump to visit China—a reciprocal gesture that Trump said he welcomed.

Despite the cordial tone, the substance of the call underscores the complexity of unresolved disputes. Both leaders reaffirmed their commitment to the Geneva agreement reached in mid-May, which temporarily rolled back U.S. tariffs on approximately $300 billion of Chinese goods from 145 percent to 30 percent and saw Beijing reciprocate by cutting duties on U.S. products from 125 percent to 10 percent. However, subsequent accusations from both sides—Washington alleging that China is slow-walking export licenses for strategic minerals, and Beijing protesting fresh U.S. restrictions on semiconductors and student visas—have undercut progress. The 90-minute discussion sought to bridge these gaps ahead of the high-level talks.

A key flashpoint remains China’s control over rare earth minerals, which are vital for high-tech manufacturing, defense systems, and electric vehicle batteries. During the call, Trump and Xi agreed that “there should no longer be any questions respecting the complexity of rare earth products,” signaling mutual acknowledgment of how essential these materials are to global supply chains. U.S. officials insist that China’s export curbs on certain rare earth magnet technologies have impeded American electronics and defense contractors, while Chinese leaders contend that their measures are justified on national security grounds.

The Geneva accord had stipulated that China would expedite licenses for U.S. firms to import certain rare earth materials. Yet, Washington claims that only a fraction of the requested permits have been approved, fueling skepticism about Beijing’s commitment. By bringing rare earth issues to the presidential level, Trump and Xi appear determined to prevent the dispute from strangling industries reliant on neodymium, praseodymium, and other critical elements. If the upcoming negotiations yield a clear, enforceable road map for rare earth trade, it could relieve pressure on U.S. automakers, defense contractors, and renewable-energy manufacturers who have faced supply bottlenecks.

Tariffs, Export Controls, and Tech Restrictions

Although the Geneva agreement represented an initial de-escalation, a full resolution of U.S.-China tariffs remains elusive. In April, the Trump administration had imposed blanket duties of up to 145 percent on a broad swath of Chinese imports, while Beijing retaliated with levies of up to 125 percent on U.S. goods. While both sides agreed to stand down for 90 days, the possibility of tariffs rising again if negotiations falter looms large. Trump’s announcement that talks will resume suggests a desire to build on the temporary truce, but he has not ruled out reinstating higher duties if China fails to uphold its promises.

Separately, the U.S. has introduced stricter export controls designed to curtail Chinese access to advanced semiconductor technologies. Export licenses for cutting-edge chips and manufacturing equipment now undergo enhanced scrutiny, a move intended to protect American national security. Chinese officials have protested that such restrictions undercut the spirit of the Geneva deal, which they believed called for mutual easing of barriers. Meanwhile, Beijing has voiced strong objections to the U.S. decision to impose new limitations on certain categories of Chinese student visas, viewing it as retaliation rather than a legitimate security measure. The upcoming trade talks will need to address these intertwined issues of both tariffs and export rules to prevent the relationship from sliding back into open confrontation.

Financial markets initially rallied on Thursday after Trump announced the phone call, hopeful that the thaw in trade rhetoric would end months of stalemate. U.S. stocks opened higher as investors bet on a resumption of substantive dialogue between Washington and Beijing. However, gains quickly dissipated as traders awaited further details on the agenda and timeline for the new round of talks. The trade relationship between the world’s largest economies—nearly $600 billion in annual goods exchanged in 2024—remains a major driver of global growth. Any misstep could reverberate through supply chains, stoke inflation, and depress consumer and business confidence worldwide.

Analysts caution that mere resumption of discussions does not guarantee a durable solution. Structural disagreements—over technology transfer, intellectual property protection, market access, and industrial subsidies—still underpin much of the U.S.-China trade friction. Past negotiating cycles, including those under the previous administration, have shown that even protracted talks can result in limited or partial agreements. Yet with Riyadh and Moscow closely monitoring outcomes, and Europe increasingly anxious about the impact of U.S.-China tensions on its own industrial sector, both sides acknowledge that maintaining dialogue is critical to avoid escalation that could trigger a deeper global economic slowdown.

Diplomatic Dimensions Beyond Trade

Although trade constituted “almost the entire” focus of the Trump-Xi call, their conversation did not touch on other geopolitical flashpoints. Trump explicitly noted that topics such as Russia, Ukraine, and Iran did not arise. By isolating trade from broader international issues, both presidents appear to be compartmentalizing their relationship, aiming to deconflict economic disputes even as strategic competition intensifies on multiple fronts. Observers see this as a reflection of Trump’s broader approach: to channel direct executive-level engagement toward commercial grievances while delegating security and human-rights concerns to separate diplomatic channels.

Xi’s invitation for a state visit—mirrored by Trump extending an invite to Xi for a future U.S. trip—signals a mutual interest in maintaining high-level political ties despite simmering distrust. A formal state visit would represent a major diplomatic milestone, potentially opening the door to broader discussions on climate cooperation, nonproliferation, and regional security. For now, however, both leaders remain focused on economic reconciliation. Chinese foreign ministry statements acknowledged that Trump initiated the request for the call, portraying Beijing as responsive to U.S. overtures and reinforcing Xi’s portrayal of China as a constructive global partner.

Key U.S. Officials and Their Mandate

Trump’s choice of envoys underscores the administration’s approach to the negotiations. Treasury Secretary Scott Bessent, with his background in economic policy and global markets, is expected to lead discussions on financial sanctions and currency issues. Commerce Secretary Howard Lutnick brings expertise in industrial policy and technology management, positioning him to address China’s subsidy programs and enforcement of intellectual property rights. U.S. Trade Representative Jamieson Greer, a veteran trade negotiator, will focus on the overarching structure of tariff commitments and dispute-resolution mechanisms.

These three will carry a dual mandate: to verify China’s compliance with Geneva’s rare earth license provisions and to negotiate broader commitments on sectors such as agriculture, services, and manufacturing. In particular, the U.S. delegation aims to secure stronger guarantees that China will not erect new non-tariff barriers—such as “forced localization” requirements for data storage or cloud computing—while safeguarding U.S. firms’ market access. The inclusion of senior economic officials is intended to signal that Trump regards the trade agenda as central to his economic policy, rather than a side issue subordinate to military or diplomatic concerns.

From Beijing’s perspective, the upcoming talks offer an opportunity to recalibrate its trade relationship with the United States without undermining its own strategic objectives. Chinese leaders face domestic pressures to sustain economic growth, offsetting the slowdown in Europe and the U.S. by boosting exports and stabilizing investor sentiment. For Xi Jinping, maintaining a delicate balance between opening markets and protecting critical industries is paramount. Since early 2025, Beijing has sought to accelerate approval for rare earth exports—an area where Western firms have complained of delays—while simultaneously bolstering its homegrown semiconductor sector through subsidies and nationalistic procurement policies.

However, China’s negotiation team must navigate competing domestic interests: manufacturing hubs in southern provinces depend on unhindered access to U.S. markets, while strategic sectors in Beijing and Shanghai lobby for continued protection from foreign competition. In public statements, Chinese officials emphasize that any agreement must respect mutual “core interests” and avoid unilateral imposition of rules. Their promise to resume agricultural purchases from U.S. farmers—an outcome of earlier talks—will be scrutinized, as farmers in Midwestern states wait to see if Chinese tariffs on soybeans and corn will be rolled back in full. The ability of Xi’s negotiators to square these circles will be a crucial determinant of the talks’ success.

Implications for Global Supply Chains

A stable U.S.-China trade relationship is critical to global supply chains that span continents. Industries such as consumer electronics, automotive manufacturing, and pharmaceuticals rely on integrated networks of components sourced from both the United States and China. Disruptions—whether through higher tariffs or halts in rare earth shipments—can ripple across production lines, forcing suppliers to seek alternative routes that are often more expensive or technologically inferior. For example, the electric vehicle market depends heavily on high-performance magnets and battery-grade lithium; any Chinese restriction on these inputs could delay EV rollouts in North America and Europe.

By renewing direct engagement at the presidential level, both sides hope to signal to multinational corporations that the era of uncontrolled tariff escalation may be over. Graphite, cobalt, and other critical minerals also stand to benefit from a clear understanding of export licensing procedures, potentially lowering costs for battery manufacturers worldwide. Similarly, tech companies that rely on Chinese-made semiconductors hope for a rollback of stringent export controls that have frustrated chip designers and equipment vendors. In the longer term, a durable deal could stabilize commodity prices—from copper to agricultural staples—ensuring that inflationary pressures do not reignite at a sensitive moment for global growth.

While the announcement of renewed talks has injected a measure of optimism into markets, substantial risks remain. Critics warn that both sides have a history of reaching interim agreements that unravel under domestic political pressure. In the United States, manufacturing and labor groups may resist deeper concessions that would reduce tariffs on Chinese goods, arguing that such access incentivizes offshoring. In China, state-owned enterprises could push back against commitments to end subsidies or reduce joint-venture requirements for foreign firms. If either side perceives the other as exploiting concessions or failing to uphold its promises, negotiations may stall, leading to a resumption of tariff tit-for-tat.

Nevertheless, the strategic rationale for dialogue is clear. A drawn-out trade war threatens to stall economic expansion in both countries, undermining consumer confidence and discouraging business investment. For emerging markets—particularly in Southeast Asia and Latin America—a stable U.S.-China economic relationship could mean better access to both export markets and investment flows. At a time when geopolitical tensions over Taiwan, the South China Sea, and technology standards loom large, trade talks offer a channel to separate economic competition from security disputes.

As the three U.S. envoys prepare to travel to Beijing, the world will be watching to see if the momentum generated by Trump’s 90-minute call with Xi can translate into tangible agreements. The success or failure of these talks may well define the next phase of globalization, determine the trajectory of critical technology industries, and shape diplomatic alignments for years to come. For now, both Washington and Beijing have signaled willingness to engage, but the substantive details and implementation will ultimately determine whether this chapter in U.S.-China relations ends in truce or tension.

(Adapted from CNBC.com)