Trump and Xi Hit Pause Is the Trade War Really Over?

Article Heading: Trump-Xi Call Restores Trade Truce: But the Supply Chain War Has No End in Sight

The high-stakes game of US-China trade relations has, for the moment, stepped back from the precipice. A recent phone call between US President Donald Trump and Chinese President Xi Jinping has seemingly restored a fragile trade truce, offering a temporary respite from escalating tensions. But is this enough to resolve the deep-seated issues plaguing the relationship, particularly the growing battle over critical supply chains?

Trump and Xi engaged in a 90-minute conversation, agreeing to resume trade talks that had previously stalled amidst mutual accusations of reneging on prior commitments. This dialogue offers a temporary break in the escalating feud between the two global superpowers, but critical divisions remain, especially concerning supply chains vital to both nations' security.

Key Takeaways from the Trump-Xi Call:

• Resumption of Trade Talks: Both leaders agreed to restart negotiations, providing a glimmer of hope for a potential resolution.
• Supply Chain Concerns Remain: Despite the positive tone, deep divisions persist regarding control and access to crucial supply chains.
• Differing Perspectives: The call highlighted fundamental differences in how the US and China view trade disputes.

Background to the Tensions

US officials have accused China of backtracking on pledges made in May to ease export restrictions on rare earth minerals. Meanwhile, Beijing has criticized Washington's actions, including:

• Warning companies against using China’s most advanced AI chips.
• Restricting chip design software sales to China.
• “Aggressively revoking” Chinese student visas.

Yun Sun, director of the China program at the Stimson Center, characterized the phone call as a "win," noting that, “Both sides acknowledge that this was a positive interaction, and the two leaders coming together can solve problems."

China’s Leverage: Rare Earth Dominance

Trump’s eagerness for the call underscores the leverage China holds in the rare earth sector. Since April, China's export controls have disrupted mineral shipments, causing concern in both Europe and America. Xi maintained that China has “seriously and earnestly” complied with the agreement, despite US accusations of delays in approving rare earth exports.

Wu Xinbo, director of the Center for American Studies at Fudan University, explained that export license applications can take up to 45 working days for approval, stating, "In principle, I can agree to export to you, but I can speed things up or slow them down."

Zhiqun Zhu, director of the China Institute at Bucknell University, described China’s rare earth dominance as “one of the few cards” it holds in the trade war.

Export Controls: A Potential Bargaining Chip?

Trump's announcement that Commerce Secretary Howard Lutnick will join the next round of trade talks alongside Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer suggests that US export controls may be on the table. This could be a potential win for Beijing.

However, Sun predicts continued tension, anticipating that “This ‘three steps forward two steps back’ is going to be the norm from now on.”

Diverging Worldviews

The call highlighted significant differences in how the US and China approach trade disputes. Trump focuses primarily on trade as a standalone issue, while Beijing views it within the broader context of bilateral relations.

While Trump highlighted that the call "focused almost entirely on TRADE,” the Chinese readout emphasized Xi’s concerns regarding Taiwan and Chinese student visas. Xi urged the US to handle the Taiwan question with prudence and expressed concern over visa policies affecting Chinese students.

Brian Wong, an assistant professor at the University of Hong Kong, summarized the core difference: “Whilst Trump views the competition through primarily trade surplus/deficit terms, Xi views territorial integrity as … more important than the country’s economic interests.”

Looking Ahead

The Trump-Xi phone call has provided a temporary pause in the escalating US-China trade war, but fundamental disagreements remain. The battle for control of critical supply chains, differing perspectives on trade, and broader geopolitical tensions suggest that the path forward will be fraught with challenges. Whether this truce can evolve into a lasting resolution remains to be seen, but one thing is clear: the relationship between these two global superpowers will continue to shape the world stage for years to come. The delicate balance hinges on both sides' willingness to navigate these complex issues with diplomacy and a genuine commitment to finding common ground.

Source: https://edition.cnn.com/2025/06/06/china/trump-xi-call-trade-truce-int-hnk