“Very Positive Conclusion” – Trump Confirms ‘Very Good Phone Call’ With Xi

Trump and Xi spoke amid soaring tensions on trade © Mandel NGAN, Pedro Pardo / AFP/File

| Published June 5, 2025

US President Donald Trump held a long-awaited phone call with Chinese President Xi Jinping Thursday as the leaders of the world’s two biggest economies tried to avoid an all-out trade war.

U.S. President Donald Trump and Chinese President Xi Jinping engaged in a pivotal 90-minute phone conversation, marking a significant step toward easing the protracted trade tensions between the two economic superpowers. Both leaders described the dialogue as “very positive,” agreeing to resume stalled trade negotiations and extend mutual invitations for state visits.

Key Outcomes of the Call

• Resumption of Trade Talks: The leaders agreed to restart bilateral trade discussions, focusing on critical issues such as tariffs and access to rare earth minerals.

• Temporary Tariff Reductions: In a move to de-escalate tensions, the U.S. reduced tariffs from 145% to 30% for 90 days, while China lowered its tariffs on U.S. goods from 125% to 10%.

• Upcoming Meetings: High-level meetings are planned, with the U.S. delegation comprising Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer.

• Focus on Trade: The conversation centered exclusively on trade matters, deliberately avoiding discussions on other geopolitical issues.

Market Reaction

The financial markets responded positively to the news of the renewed dialogue. S&P 500 futures experienced a notable uptick, reflecting investor optimism about potential progress in U.S.-China trade relations.

President Donald Trump confirmed the call, which was first reported by Chinese state-run media, characterizing it as a ‘good’ conversation and saying a state visit to China may be in his future

President Donald Trump (center left) hosted Chinese President Xi Jinping (center right) at Mar-a-Lago in April 2017, alongside first lady Melania Trump (left) and Xi’s wife Peng Liyuan (right)

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The Trump-Xi phone call and resulting trade thaw carry several strategic and economic implications:

1. Short-Term Market Boost, Long-Term Uncertainty

The immediate surge in U.S. markets—particularly S&P futures—reflects renewed investor confidence, but the optimism hinges on whether trade talks lead to permanent policy shifts, not just temporary tariff pauses.

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2. Reassertion of Direct Diplomacy

This call underscores the power of direct leader-to-leader engagement in breaking geopolitical deadlocks, bypassing months of bureaucratic stall-outs and signaling a possible return to more bilateral, executive-driven foreign policy.

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3. Tariff Leverage Still in Play

Both nations temporarily lowered tariffs, but neither fully eliminated them—suggesting tariffs are still viewed as strategic tools to extract concessions during negotiations, not just punitive measures.

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4. China Signaling Openness—But on Its Terms

Xi’s invitation for Trump to visit, along with a willingness to talk trade (while avoiding military or human rights topics), reflects China’s aim to stabilize its economy without surrendering geopolitical leverage.

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5. Policy Testing Ground for a Second Trump Term

The outcome of these talks could preview how Trump would reshape global trade and diplomacy if reelected—with an emphasis on aggressive negotiation, quick executive action, and targeted tariff threats.

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Overall Takeaway:

The Trump-Xi phone call represents a critical diplomatic signal that, despite years of rising tension and mutual tariff escalation, both the U.S. and China remain willing to re-engage in pragmatic, transactional dialogue—especially on economic issues. While the call resulted in positive language and a temporary de-escalation through reduced tariffs, it also revealed the limits of that cooperation: key disagreements over rare earths, technology access, intellectual property, and geopolitical influence remain untouched.

Markets responded with enthusiasm because this direct communication restores a sense of stability and predictability—two qualities global investors crave. However, the structural differences between the two nations’ economic models and strategic goals mean that this détente is fragile and conditional. Neither side is backing away from using trade as a geopolitical weapon, but both are showing they’re open to recalibrating tactics when it serves domestic interests.

In essence, the phone call is not the end of the U.S.-China trade conflict—it’s a strategic pause, driven as much by economic necessity as diplomatic intent. The road ahead will depend on whether this renewed engagement leads to enforceable agreements or simply a temporary relief from mounting pressure.

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SOURCES: ZEROHEDGE – “Very Positive Conclusion” – Trump Confirms ‘Very Good Phone Call’ With Xi

DAILYMAIL ONLINE – Trump says he’ll visit China with Melania after ‘very good’ phone call with Xi Jinping to work out trade deal

FOREX LIVE – Trump says call with Xi ‘reached a very positive conclusion’

FRANCE 24 – Trump, Xi hold long-awaited phone call on trade war

DW – US-China trade talks to move forward after Trump-Xi call

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