Trump, Xi agree to more trade talks as rare earths dispute cools

WASHINGTON — President Donald Trump and Chinese President Xi Jinping on Thursday agreed to further trade talks aimed at resolving disputes over tariffs and supplies of rare earth minerals at the heart of tensions between the world’s two largest economies.

Trump acknowledged Thursday the trade relationship with China had gotten “a little off track” but said now “we’re in very good shape with China and the trade deal.” Additional negotiations, Trump said, would occur “shortly” at “a location to be determined.”

U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will represent Trump at the talks.

“This is very complex stuff, and we straightened it out,” Trump told reporters in the Oval Office. “We were straightening out some of the points, having to do mostly with rare earth magnets and some other things.”

The call generated some hope on Wall Street for lower duties between the trading partners, though investors’ optimism was limited. U.S. equities remained little changed Thursday afternoon after an earlier advance following the leaders’ call.

“The 90-minute call between Trump and Xi appears to have importantly broken the impasse on critical minerals and other immediate concerns to pave the way for trade talks,” said Wendy Cutler, a former senior U.S. trade negotiator now at the Asia Society Policy Institute.

Xi invited Trump and first lady Melania Trump to visit China, according to a Chinese government statement, and Trump posted on social he “reciprocated” with an invitation for Xi to visit the United States. The U.S. president later said that both leaders had accepted the offers.

Thursday’s call marked the latest turn in the roller-coaster relationship between the U.S. and China since Trump’s return to the White House. It came just one day after the U.S. president lamented on social media that his counterpart was “EXTREMELY HARD TO MAKE A DEAL WITH.”

Whether the call will unlock lasting trade peace, and crucially, shipments of critical minerals needed by U.S. companies, remains to be seen.

Trump did not specify whether Beijing had agreed to speed export licenses on magnets crucial to a wide range of critical American products. Questions also remained about what Trump conceded to Xi.

The Chinese Foreign Ministry said in a statement that Trump told Xi Chinese students are welcome to study in the U.S., even though the U.S. has moved to block foreigners from obtaining visas and revoke some from some current students.

“Chinese students are coming. No problem. No problem. It’s our honor to have them,” Trump later told reporters.

China’s statements on the call also struck a more combative tone than the U.S. leader’s. The foreign ministry said earlier the call was initiated at Trump’s request. Xi asked Trump to remove the “negative measures” the U.S. has imposed on China, according to the ministry’s statement.

The Chinese leader said Beijing had complied with the terms of tariff truce struck by the two nations last month in Geneva, the statement said, even as U.S. officials have complained that export controls on rare earths have not been lifted quickly enough.

“Given how quickly misunderstandings surfaced after the Geneva meetings, expectations for the trade talks should be low,” Cutler said.

Trump said the 1 1/2-hour conversation was focused almost entirely on trade, though the Chinese readout suggested Xi had cautioned Trump on Taiwan after reports the U.S. was stepping up arms shipments there.

Fragile Truce

Still, not all comments from the Trump administration Thursday were positive. Lutnick called for increased enforcement of export controls to prevent China from stealing technology that could support Beijing’s ambitions in artificial intelligence and aviation.

“In the race for AI supremacy, they are behind us, but they are working with the central government to get us, right, to beat us so that they will have intellectual superiority over us,” Lutnick said during a congressional hearing.

Xi likened the U.S.-China relationship to a “giant ship” and said both leaders must “take the helm and set the right course,” saying “it is particularly important to steer clear of the various disturbances and disruptions,” according to the Chinese Foreign Ministry.

Trade negotiations between the two rivals stalled after the May 12 Geneva talks, with both sides accusing the other of violating an agreement that brought down tariffs from massive highs.

The phone call between the leaders marks their first known formal contact since Trump took office. The last conversation between Trump and Xi took place in January before the U.S. president’s inauguration.

Tension Points

Trump has long said direct talks with Xi were the only way to resolve differences between the nations, but the Chinese leader had been reluctant to get on the phone with his American counterpart — preferring that advisers negotiate key issues.

Even if flashpoints like rare earths and visas are settled, the two countries have a narrow window to iron out the full scope of their differences. U.S. and Chinese trade chiefs only agreed in Geneva last month to lower tariffs for 90 days, as they worked toward a broader deal.

History suggests that any final agreement could be a long time coming. In 2018 during Trump’s first term as president, the two sides agreed to put their dispute “on hold” after a round of negotiations, but the U.S. soon backed away from that deal, leading to more than 18 months of further tariffs and talks before the signing of the “Phase One” deal in January 2020.

One goal for China this time around will be seeking relief from U.S. export controls on cutting-edge chips vital for AI and military advancement. That’s likely to be a sticking point in Washington, with both Democrats and Republicans in rare agreement that Beijing poses a national security threat.

Beyond strains in economic ties, geopolitical frictions are also growing. Foreign Ministry officials this month protested U.S. Defense Secretary Pete Hegseth’s assertion at a gathering of military chiefs in Singapore that China poses an imminent threat to Taiwan, a self-ruled island claimed by Beijing.

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(With assistance from Josh Xiao, Alan Wong, Colum Murphy and George Lei.)