China and US agree to revive tariff talks amid rare earth tensions: Trump after Xi call

China and the United States have agreed to resume tariff negotiations, US President Donald Trump said following a phone call with Chinese President Xi Jinping. The move comes as both sides remain locked in a prolonged trade standoff, with rare earth mineral curbs and high-tech restrictions fuelling tensions.

According to reports, Xi told Trump he is “welcome to visit China again” and urged the US to cancel “negative measures” imposed against Beijing. Xi stressed that dialogue and cooperation are the “only right choice” for both nations and called for enhanced exchanges across diplomacy, trade, military, and law enforcement.

On Taiwan, Xi urged Washington to “handle the issue carefully,” underlining its strategic sensitivity. Xi said both sides should “strive for a win-win outcome,” amid concerns about economic decoupling and global supply chain disruptions.

The discussion came just a day after Trump expressed frustration with Xi, calling him “VERY TOUGH” and “EXTREMELY HARD TO MAKE A DEAL WITH” on his social media platform. His remarks followed weeks of stalled dialogue, despite a tentative agreement on May 12 that had seen both nations scale back their tariff rates temporarily.

While the US trimmed duties on Chinese imports from 145% to 30% for a 90-day window to facilitate further talks, China responded by slashing its own tariffs on American goods from 125% to 10%. However, deep-rooted disagreements over critical resources, technology access, and national security have kept both sides at odds.

Among Washington’s concerns are China’s curbs on critical mineral exports and its strategic technological ambitions. Beijing, in turn, has pushed back against U.S. restrictions on semiconductor sales and tightening rules on visas for Chinese students.

Treasury Secretary Scott Bessent recently said only direct engagement between the two leaders could break the deadlock. Yet fundamental differences remain: Trump aims to revive US manufacturing and reduce reliance on Chinese supply chains, while Xi is focused on advancing China’s position in high-tech sectors such as EVs and artificial intelligence.

The economic backdrop adds further strain. China is grappling with slowing growth amid a prolonged property crisis and weakened consumer demand. Meanwhile, the US reported a $295 billion trade deficit with China in 2024.

The last direct conversation between Trump and Xi occurred in January, days before the inauguration. While that exchange also centered on trade and Trump’s push for China to clamp down on fentanyl exports, his recent tone suggests growing skepticism. “China HAS TOTALLY VIOLATED ITS AGREEMENT WITH US,” Trump posted last week. “So much for being Mr. NICE GUY!”

According to the Census Bureau, the US had a trade deficit of $295 billion with China in 2024. China's emphasis on manufacturing has transformed it into a significant economic and geopolitical player. However, the country has been navigating a sluggish economy following a real estate crisis and COVID-19 lockdowns that have hampered consumer spending.

(With agency inputs)