Trump, China’s Xi Have History’s First Call Since Start of Trade War in 2025
Diplomatic Steps Signal Thaw in U.S.-China Relations
In a dramatic reversal of world fortunes, Chinese President Xi Jinping and erstwhile-US President Donald Trump had their first telephonic talk after the eruption of the 2025 trade war — one that has profoundly shaken the world economy, shocked the markets, and ignited the two world super economies. The phone call on June 5, 2025, is a significant step towards eventual de-escalation, in spite of differences.
Background: The 2025 U.S.-China Trade War
Trade war in early years was necessitated largely by Trump’s new offer of “America First” economic policy during his presidential campaign and a return to the international world stage of global political leadership. In March 2025, compelled by increasing grievances against China’s protectionist trade practices, intellectual property theft, and currency manipulation, Trump directed the imposition of a 35% tariff on a broad category of Chinese imports.
China hit back with tariffs on American goods such as soybeans, semiconductors, electric vehicles, and consumer electronics. Markets across the globe were rocked by tit-for-tat retaliation, worst affected being multinational firms, farmers, and the technology industry.
Talks between Beijing and Washington had not moved forward since then — until today.
The much-awaited phone call, which lasted around 45 minutes, was “constructive” as well as “respectful” to both sides. White House and Chinese Ministry of Foreign Affairs media reports suggest that the call was focused on:
- Containing trade tensions
- Setting up channels of communication
- Each side’s mutual economic interests
- Global cooperation as well as strategic stability
The two presidents were keen on the economic effect of maintaining tariffs, more so for inhibiting world growth and inflation. Trump, according to sources, was keen on safeguarding American companies and workers, whereas Xi requested the rest of the globe to treat one another with respect and trade respectfully.
Quotes from Both Presidents
Trump stated in a statement released immediately after the call:
I had a great, very forthright discussion with President Xi. We’re going to try to have a good one, a fair one, a good one for the American people and get the playing field equal. But I made it extremely, extremely clear: we are not going to accept unfair trade agreements anymore.
The Chinese official read was slightly less diplomatic and stating:
President Xi repeated that it has to be cooperation, and not confrontation. China is ready to solve problems in trade through negotiations, as long as the negotiations are equal and each side has respect for the other.
Reactions of Global Markets’ and Analysts
Markets welcomed the news, Dow Jones Industrial Average went up 380 points and Shanghai Composite Index climbed 2.1% on close. S&P 500 also increased mildly along with Nasdaq, with the investor mood improved by the rumors of settlement in the air.
Top analysts viewed the phone call as tentative but a significant move towards de-escalation:
- Morgan Stanley: “The exchange is an opening of diplomatic backchannels. No short-term breakthroughs are in the works, but the continuation of the dialogue is of supreme importance.”
- Goldman Sachs: “The maneuver suggests that both sides know that the unsustainability of ongoing ratcheting up of trade tensions, especially in light of the fact that both economies are under domestic pressure.
The Economic Cost So Far
As of the beginning of the trade war:
- Revenues from US farmers’ exports declined by a paltry 18% with soybean exports to China disintegrating.
- US tech giants Apple, Qualcomm, and Tesla were hit by supply chain disruptions and losses.
- China’s manufacturing sector has been marred by a slowdown, foreign direct investment declining and domestic consumption affected.
- Both countries have been hit by inflationary pressures, which have pushed up consumer prices.
World GDP estimates have been downgraded by such organizations as the IMF and World Bank, which cautioned that the protracted conflict would slash 0.5% from world growth in 2025.
Domestic Political Motivations
Trump’s reconciliation with Xi also seems driven by growing domestic pressure on inflation and US job loss due to the trade war. As the 2026 midterms near, the Republican Party is facing growing pressure to calm the economy.
For Xi Jinping, the invitation is an opportunity to revive investor confidence and cement China as a power diplomatic force against the domestic threats of a housing bubble and reduced GDP growth.
State of Negotiations: Prospects
The two nations are also going to pre-emptive trade negotiations by diplomatic envoys, sources told the magazine. Trump and Xi are also expected to share a bilateral meeting during the upcoming G20 Osaka Summit later this year in August.
The issues likely to receive top priority in future talks are:
- Rollback of tariffs
- Regulation on technology transfer
- Intellectual property rights
- Trade deficit and currency manipulation
But experts caution that the talks will be painful and full of hiccups. The relationship between America and China is complicated, and both of these presidents have home bases of support who will complain if they are asked to make concessions.
World Implications: Going Beyond Trade
The Trump-Xi phone call can also pave the way for wider geopolitical re-engagement. The tensions have accumulated in recent times on:
- Taiwan and U.S. arms sales to Taiwan
- South China Sea military operations
- Cybersecurity and surveillance
- Reconfiguring the global supply chain
There are other trading relationships that can be used to create room for multilateral cooperation on climate, AI regulation, and pandemic preparedness — all of which need collective leadership.
Conclusion
Trump telephone call on June 2025 between Donald Trump and Xi Jinping was a warming of the chill that had characterized U.S.-Chinese relations. No hard bargains were done, yes, but that two world leaders at least spoke to each other is a positive theme for a more stable and cooperative future.
As the two nations embark on the cautious waltz of negotiations, the world waits with bated breath. Dawn’s breaking of a new era in U.S.-China diplomacy — or just an interlude before they go back to business as usual? Only time will be able to tell, but at least for the time being, lines of communication are open at last.