Trump and Xi talk on phone as tariff battle continues

President Donald Trump and Chinese President Xi Jinping held a phone call Thursday amid ongoing tensions between the two superpowers.

Chinese state media and the Chinese foreign ministry said that the call happened at the White House’s request. No other information was immediately made public. The Chinese foreign ministry said Thursday morning that the call was ongoing as of 9 a.m. ET.

It’s the first known call between the two leaders to take place during Trump’s second term, though the two spoke in January ahead of Trump’s inauguration.

Trump had posted to social media early Wednesday about his frustrations with the state of talks.

“I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump wrote at 2:17 a.m.

Stocks ticked higher in pre-market trading on news of the call amid investor optimism that easing tensions could boost trade.

The U.S. and China have been locked in a heated trade war since the early days of Trump’s second administration, with volleys of tariffs and retaliatory tariffs ratcheting up duties on billions of dollars worth of goods.

The White House and the Chinese embassy did not immediately return requests for comment.

The current tariff level on Chinese imports brought into the U.S. is at least 30%. That’s down from the 145% punitive level Trump had imposed until a handshake agreement in Geneva last month led to a mutual stand-down that also saw China reduce its duties on U.S. imports down to 10% from 125%.

But tensions heated up again Friday after Trump accused China of violating the Geneva understanding, though without adding many specifics. That prompted China to level a similar accusation against Trump on Monday.

Trump remains fixated on closing America’s trade deficit with China, which is the difference between how much the U.S. imports from China versus how much it exports. On Thursday, fresh data showed the gap dropped sharply in April.

It’s an indication that the new tariffs have begun to hit hard. Data from the Commerce Department showed the largest-ever drop in total imports. The deficit with China declined to $19.7 billion, the lowest level since March 2020.