Trump Reaches Out To Xi As Markets React, Tensions Simmer (UPDATED)

U.S. stocks dipped in early trading on Thursday following reports of a phone call between Presidents Donald Trump and Xi Jiping, signaling a possible thaw in China trade tensions.

Diplomatic Outreach Amid Rising Friction

Trump initiated the phone call, according to CNBC, citing Chinese state media outlet Xinhua.

Beijing's Ministry of Foreign Affairs confirmed the outreach came from the U.S. side. The White House did not immediately respond to CNBC's request for comment on the report.

The call marked only the second one-on-one conversation between Trump and Xi this year. The two leaders last spoke on Jan. 17, before Trump's inauguration.

CNBC noted that the renewed contact follows escalating tensions. Although both countries temporarily rolled back tariffs last month following talks in Switzerland, that progress appears to be unraveling.

The Trump administration has since accused China of delaying mineral export approvals—a key term from the Geneva negotiations. Beijing, in turn, criticized new U.S. restrictions on student visas and issued complaints over American warnings against Chinese semiconductors.

Further straining ties, the White House has implemented additional chip export restrictions, claiming national security concerns. Chinese officials view these steps as retaliatory and damaging to trade progress.

Also Read: Tariff Chill Lifts Some Retailers, But Wall Street Fears a Second Freeze

Fresh Outreach Follows Week of Stalled Progress

Trump's phone call with Xi comes a week after Treasury Secretary Scott Bessent described U.S.-China trade talks as "a bit stalled," highlighting a potential turning point in the stalled negotiations.

Bessent told Fox News that a final deal might require direct involvement from both Trump and Xi. He said talks had lost momentum since the temporary Geneva truce and that leader-level engagement could help resolve the impasse.

Although earlier negotiations reopened dialogue between the two sides, tensions escalated again following new U.S. export curbs and visa restrictions. In response, China urged the U.S. to lift tariffs still in place.

A federal appeals court ruling last week preserved much of Trump's tariff framework, underscoring the need for high-level action to move talks forward.

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