US Pres. Trump: Concluded a very good phone call with President Xi of China

Eren Sengezer FXStreet

United States (US) President Donald Trump said on Truth Social on Thursday that he had a "very good phone call" with Chinese President Xi Jinping, during which they discussed the intricacies of the trade deal.

"The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both countries," Trump added. "There should no longer be any questions respecting the complexity of rare earth products."

Trump also noted that his representatives, Secretary of the Treasury Scott Bessent, Secretary of Commerce Howard Lutnick and Trade Representative Jamieson Greer, will soon meet the Chinese team for the next round of talks at a yet-to-be determined date and location.

Market reaction

The US Dollar Index recovers from session lows following this headline and was last seen losing 0.2% on the day at 98.65. Meanwhile, the S&P 500 Index and the Nasdaq Composite cling to modest daily gains, rising 0.25% and 0.5%, respectively.

US-China Trade War FAQs

What does “trade war” mean?

Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

What is the US-China trade war?

An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

Trade war 2.0

The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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