Donald Trump and Xi Jinping held phone call on Thursday, Chinese state media reports

Unlock the White House Watch newsletter for free

Donald Trump spoke to Chinese President Xi Jinping by telephone on Thursday, the state-owned Xinhua news agency said, amid simmering trade tensions between the world’s two largest economies.

The two men were last known to have spoken to each other in January, before Trump’s second inauguration as president. Xinhua added that the call took place at Trump’s request.

The White House did not immediately release a statement on the conversation.

The call came a day after the US president described his Chinese counterpart as “extremely hard to make a deal with” as both countries have accused each other of reneging on a trade truce signed in Geneva last month.

The deal reached between the US and China in Switzerland temporarily reduced their tit-for-tat tariffs, which had soared as high as 145 per cent, with Washington saying it would also restart the flow of critical rare earths and related magnets to the US.

But last week, Washington accused Beijing of failing to live up to its promises to approve licences for exports of rare earths, leading to shortages that are threatening to shut down parts of US industry.

China has accused the US of “seriously violating” the Geneva agreement by issuing new warnings on using Huawei chips globally, halting sales of chip design software to Chinese companies and cancelling visas for Chinese students.

Earlier on Thursday, the Chinese commerce ministry struck a defiant tone over its export controls, telling reporters in Beijing that they were common international practice given rare earths can be used for civilian and military purposes.

The trade war between the US and China triggered a sharp sell-off in global equities, which have recovered and stabilised since the truce was hatched in Switzerland last month.

But investors are closely watching whether that pact will hold or if tensions will flare up again, raising the possibility of another escalation of tariffs.

Trump has frequently said that his strong personal relationship with Xi will help cut through the trade and strategic tensions between the US and China.

In early 2020, Trump struck a trade agreement with Xi, putting a temporary end to the trade war that began in 2018 between the countries.

But that deal was quickly overshadowed by an eruption of US-China tensions during the pandemic, and subsequently broke down as US officials, including from the Biden administration, accused China of failing to comply with its commitments.

Thursday’s call between Trump and Xi comes ahead of the US president’s planned meeting at the White House with German Chancellor Friedrich Merz, in which trade tensions between the US and the EU are expected to be at the top of the agenda.

Trump has threatened to impose 50 per cent tariffs on EU imports on July 9 unless a deal is reached with Brussels.

Read the full article here