Description: US President Donald Trump and Chinese President Xi Jinping held an hour and a half long phone conversation on 05 Jun as they aimed to ease recently inflamed trade tensions. Positive remarks were gathered from both sides, as Trump stated that he and President Xi discussed China’s disruption of rare earth minerals exports which impacted critical industrial branches and military tensions in the Indo – Pacific, mostly regarding Taiwan. The leaders reportedly also discussed visiting each other’s countries in the upcoming months expecting a positive outcome from the restarted trade negotiations. Low – level delegations from both sides are expected to meet on Monday in London where they would resume the trade negotiations potentially leading towards a bilateral trade agreement. Chinese state media also reported that Trump reportedly told Xi he supported the One China policy for the Indo – Pacific which mostly concerned democratically governed Taiwan. Trade tensions erupted after the countries accused each other of violating the predetermined conditions in their initial trade negotiations in Geneva on 12 May, which was catalyzed by Trump’s revocation of student visas for Chinese students in the US.
Impact: The phone call between the leaders has evidently eased the tensions surrounding the trade negotiations as both countries immediately agreed on restarting the negotiations. The US has a considerably debilitated position going forward since the Court of International Trade contested the legitimacy and the legal basis of Trump’s tariffs. China has most recently engaged in expanding their geoeconomic portfolio, shoring up regional alliances in Southeast Asia as well as engaging in active diplomatic measures attempting to draw Europe closer to their sphere of influence. The restated trade negotiations are expected to intensify in the upcoming period emphasizing the economic codependence between the two largest global economies. Markets and investors remain skeptical as the global economic instability depends on settling trade differences between the US and China. The London meeting would most probably bring renewed diplomatic posturing as positions on both sides have been drastically impacted by recent developments and the reinstated trade tensions.