The fragile trade truce between the United States and China has, for now, been pulled back from the brink. <\/p>\n
US President Donald Trump finally got his long-anticipated phone call with Chinese leader Xi Jinping, during which the two agreed to resume trade talks that had stalled over accusations from each side that the other had reneged on previous promises. <\/p>\n
Thursday\u2019s 90-minute conversation brought a temporary reprieve from an escalating feud between the superpower rivals, but it offered no clear path toward resolving their deep-rooted divisions \u2013 especially over crucial supply chains that both sides consider vital to national security. <\/p>\n
US officials accused China of backpedaling on its pledge made during May talks in Geneva to ease export restrictions on rare earth minerals critical to a wide range of industries. Beijing, meanwhile, has bristled at Washington\u2019s moves to warn companies against using China\u2019s most advanced AI chips, restrict chip design software sales to China and \u201caggressively revoke\u201d Chinese student visas. <\/p>\n
\u201cAfter what happened during the past 10 days, I already call (the phone call) a win,\u201d said Yun Sun, director of the China program at the Washington-based Stimson Center think tank. <\/p>\n
\u201cBoth sides acknowledge that this was a positive interaction, and the two leaders coming together can solve problems. It\u2019s good for their strong man image and leadership credentials.\u201d <\/p>\n
While Trump had repeatedly expressed keenness for the call, including complimenting Xi\u2019s toughness in a late-night social media post this week, Xi has taken his time in picking up the phone. <\/p>\n
\u201cThe Chinese state is under significantly less pressure than its American counterpart in coming to the negotiating table,\u201d said Brian Wong, an assistant professor at the University of Hong Kong. \u201cThe Chinese leadership joined the call from a position of political strength, even whilst economic concerns are very much alive and real.\u201d <\/p>\n
Trump\u2019s eagerness to talk \u2013 and his speediness in declaring that he had \u201cstraightened out\u201d the dispute over rare earth exports with Xi \u2013 has once again demonstrated to the Chinese leader just how powerful his nation\u2019s dominance in the sector is. <\/p>\n
Since April, when China announced the export controls, the new system has disrupted the shipment of the minerals, raising alarms among officials and businesses alike in Europe and America. <\/p>\n
In the Chinese readout, Xi insisted that China had \u201cseriously and earnestly\u201d complied with the agreement, even as US officials have repeatedly accused Beijing of slow-walking approvals for rare earth exports. <\/p>\n
Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai, noted that official rules dictate that applications for export licenses can take up to 45 working days to be approved. <\/p>\n
\u201cIn principle, I can agree to export to you, but I can speed things up or slow them down. In reality, on a technical level, it also depends on the overall bilateral trade and economic atmosphere,\u201d he said. \u201cIf the bilateral relationship is good, then I\u2019ll go a bit faster; if not, I\u2019ll slow down. But you can\u2019t say I\u2019m violating the agreement \u2014 I\u2019m still following the standard procedures.\u201d <\/p>\n
While American businesses are likely to see more export licenses approved in the next couple of weeks, according to Wu, the export control regime is here to stay. <\/p>\n
Zhiqun Zhu, director of the China Institute at Bucknell University in Pennsylvania, put it more bluntly, calling China\u2019s dominance on rare earths \u201cone of the few cards\u201d it holds in the trade war. <\/p>\n
\u201cWhy would the US government expect China to give up the rare earth card to please the US if it treats China as the enemy?\u201d he wrote in an article prior to the Trump-Xi call. <\/p>\n
In the days leading up to the phone call, Chinese scholars have suggested that Beijing should use its leverage on rare earths to get Washington to ease its own export controls on cutting-edge chips. Unlike rare earths, China doesn\u2019t dominate this industry at the highest levels, and it views any supply bottleneck on the US side as an obstacle to its technological development. <\/p>\n
Following his conversation with Xi, Trump announced that Commerce Secretary Howard Lutnick will join Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in the next round of trade talks. <\/p>\n
That was noted by observers in both China and the US as a sign that US export controls may now be up for negotiation in a potential win for Beijing. <\/p>\n
\u201cThe US Department of Commerce is responsible for export controls, which means that in the next stage, China-US negotiations will likely go beyond tariffs and also address issues such as export controls and entity sanctions,\u201d Wu said. <\/p>\n
During his first term in office, Trump lifted a ban on American companies doing business with Chinese telecom giant ZTE at Xi\u2019s request to get a trade deal. But six years on, easing export controls on China will be a tough sell in Washington, where blocking Beijing\u2019s access to advanced American technologies has become a rare bipartisan issue. <\/p>\n
\u201cJust having Lutnick there (in the trade talks) doesn\u2019t mean that the US is going to make concessions on semiconductors,\u201d Sun said. <\/p>\n
She predicts more flare-ups of tensions down the road. \u201cThis \u2018three steps forward two steps back\u2019 is going to be the norm from now on. We\u2019re not going to see a deal agreed without any drawbacks, and we\u2019re going to see this repeating itself,\u201d she added. <\/p>\n
While the call signaled temporary relief, it also exposed stark differences in how the US and China approach their trade disputes: Trump tends to treat trade as a primary and standalone issue, whereas Beijing often views it in the context of broader bilateral relations. <\/p>\n
Trump said in his Truth Social post that the hour-and-a-half conversation phone call was \u201cfocused almost entirely on TRADE,\u201d while the Chinese readout singled out Xi\u2019s stern warning on Taiwan \u2013 the reddest of lines for Beijing \u2013 and the issue of Chinese student visas. <\/p>\n
The Chinese leader urged the US to \u201chandle the Taiwan question with prudence\u201d so that \u201c\u2018Taiwan independence\u2019 separatists\u201d will not be able to \u201cdrag China and America into the dangerous terrain of confrontation and even conflict.\u201d <\/p>\n
The contrast strikes at the core of the gulf between China and the US, Wong said. <\/p>\n
\u201cWhilst Trump views the competition through primarily trade surplus\/deficit terms, Xi views territorial integrity as \u2026 more important than the country\u2019s economic interests,\u201d he said. <\/p>\n
From Beijing\u2019s perspective, there are plenty of worrying signs. Last weekend, US Defense Secretary Pete Hegseth warned Asian allies that China posed an \u201cimminent\u201d threat to Taiwan, a self-governing democracy Beijing views as its own and has vowed to take control of, by force if necessary. <\/p>\n
Days before, Reuters had reported, citing US official sources, that Washington plans to ramp up weapon sales to Taipei to a level exceeding Trump\u2019s first term as part of an effort to deter China\u2019s intensifying military pressure. <\/p>\n
Another issue of concern for Beijing is the fate of Chinese students in the US. Last week, Secretary of State Macro Rubio, a known China-hawk, announced a plan to \u201caggressively revoke\u201d visas for Chinese students, a move that has caused widespread anxiety and anger in China. <\/p>\n
The Chinese readout quoted Trump as saying that Chinese students are welcome in the US. Trump later told reporters in the Oval Office: \u201cChinese students are coming. No problem. No problem. It\u2019s our honor to have them.\u201d <\/p>\n
Wu said the adjustment of the visa policy will be a test of Trump\u2019s leadership. During their call, Xi told Trump that the two leaders should \u201ctake the helm and set the right course\u201d for bilateral relations, saying it\u2019s particularly important to steer clear of \u201cvarious disturbances and disruptions.\u201d <\/p>\n
\u201cThis remark had a clear target \u2013 it implies that within Trump\u2019s team, there are people trying to disrupt or undermine the bilateral relationship, so now it\u2019s up to President Trump to show leadership,\u201d Wu said. <\/p>\n<\/p>\n
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