Hong Kong
CNN
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The fragile trade ceasefire between the US and China has been pulling back from the brink for now.
US President Donald Trump has finally received a long-standing call with Chinese leader Xi Jinping. Meanwhile, the two agreed to resume trade talks that have halted accusations that others had destroyed with previous promises.
Thursday’s 90-minute conversation brought a temporary reprieve from an escalating feud between superpower rivals, but it did not provide a clear pathway to resolve their deep-rooted divisions.
US authorities accused China of retreating the May pledge in Geneva to facilitate export restrictions on rare earth minerals, which are important to a wide range of industries. Meanwhile, Beijing is struggling with Washington’s move to use China’s most advanced AI chips, limit sales of chip design software to China, and warn businesses against “actively canceling” Chinese student visas.
“After what happened in the last 10 days, I’m already calling for victory (the phone),” said Yun Sang, director of the China Program at Washington-based Stimson Center think tank.
“Both sides acknowledge that this is a positive interaction and that bringing together two leaders can solve the problem. That’s good for their strong man’s image and their qualifications for leadership.”
Trump has repeatedly expressed his sharpness in Call, including complementing Xi’s toughness in a late-night social media post this week, but Xi took the time to pick up the phone.
“The Chinese state is under much less pressure than its American counterparts when it comes to the negotiation table,” said Brian Wong, an assistant professor at the University of Hong Kong. “China’s leaders have joined in calls from a position of political strength, but economic concerns are very lively and realistic.”
Trump’s enthusiasm for the story – and his speed at which he declared he “settled” the conflict over rare earth exports with XI again demonstrated to Chinese leaders how strong his country’s control is in the sector.
Since April, when China announced export controls, the new system has destroyed mineral shipments and has issued warnings among European and American officials and businesses.
In a readout from China, Xi Jinping claimed that China had “seriously and seriously” adhered to the agreement despite US authorities repeatedly denounced slow approval of rare earth exports.
Wu Simbo, director of the Center for American Studies at the University of Hudun in Shanghai, pointed out that official regulations direct that an application for an export license can take up to 45 business days before it is approved.
“As a rule, I can agree to export to you, but I can speed up or slow things down. In reality, at the technological level it also depends on the overall two-sided trade and economic atmosphere,” he said. “If the bilateral relationships are good, we’ll go a little faster. If not, we’ll slow down. But I can’t say I’m breaching the contract. I’m still following standard procedures.”
According to WU, it is likely that American companies will receive more export licenses in the coming weeks, but the export control regime will remain here.
Zhiqun Zhu, director of the Chinese Institute at Bucknell University, Pennsylvania, calls it “one of the few cards” China’s rule over the rare earths they hold in the trade war.
“Why would the US government expect China to give up the rare earth card to please the US if China treats China as an enemy?” he wrote in the article before Trump XI’s call.
In the days leading up to the call, Chinese scholars suggest that Beijing should use leverage in rare earths to facilitate Washington’s own export controls with cutting-edge chips. Unlike rare earths, China does not control the industry at the highest level and sees the supply bottleneck on the US as an obstacle to its technological development.
After a conversation with XI, Trump announced that Commerce Secretary Howard Lutnick will join Treasury Secretary Scott Bescent and trade representative Jamieson Greer in the next trade talks.
It was attracting attention by both Chinese and US observers as a sign that US export control could negotiate Beijing’s potential victory.
“The US Department of Commerce is responsible for export control. In other words, the next phase will likely result in negotiations between China and the US going beyond tariffs and address issues such as export control and group sanctions,” Wu said.
During his first term in office, Trump lifted the ban on American companies doing business with Chinese telecom giant ZTE in XI’s request to get XI’s trade deals. However, easing export controls in China will be a tough sell in Washington in six years. There, blocking access to Beijing’s advanced American technology became a rare two-party issue.
“Just having Lutonic there (in trade talks) doesn’t mean the US will make concessions to semiconductors,” Sun said.
She predicts more flare-ups in the future. “This ‘3-step forward 2-step back” will become the standard for the future. We will not see an agreed transaction without any shortcomings.
Cole had shown temporary relief, but also made a significant difference in how the US and China approach trade disputes. Trump tends to treat trade as a major standalone issue, but Beijing often sees it in the broader bilateral context.
Trump said in the Social Post of Truth that the hour-and-a-half conversation call was “almost entirely focused on trade,” but the Chinese reads have picked out Xi’s harsh warnings about Taiwan, a red habit on Beijing’s route, and China’s student visa issues.
Chinese leaders urged the US to “carefully handle Taiwan’s questions” so that “Taiwan independence” separatists “cannot draw China and the US into the dangerous topography of conflict and conflict.”
The contrast will be hit by the core of the bay between China and the US, Wong said.
“Trump sees competition primarily through surplus/deficit conditions, but XI considers territorial integrity to be more important than the economic interests of the country,” he said.
From a Beijing perspective, there are plenty of signs of concern. Last weekend, US Secretary of Defense Pete Hegses warned Asian allies that China poses a “immediate” threat to Taiwan.
A few days ago, Reuters reported, citing official US sources, that Washington was planning to raise arms sales to levels beyond Trump’s first term as part of an effort to strengthen China’s military pressure.
Another issue that concerns Beijing is the fate of Chinese students in the US. Last week, Secretary Macro Rubio, known China and his residence, announced plans to “actively cancel” visas for Chinese students. This is a move that sparked widespread anxiety and anger in China.
The Chinese reading cited Trump as saying that Chinese students are welcome in the US. Trump later told reporters in the Oval Office: “Chinese students are here. No problem. No problem.
Wu said adjustments to the visa policy will be a test of Trump’s leadership. Xi said on the phone that it is particularly important for the two leaders to avoid “various obstacles and confusion,” and told Trump that they should “steer and set the right course” for bilateral relations.
“The statement had a clear target, meaning that there are people within Trump’s team who are trying to disrupt or undermine bilateral relations.