Trump and Xi Poised for Crucial Trade Call This Week: Hassett Signals Breakthrough Amid Tariff Turmoil

Is a Trump-Xi Call the Turning Point for U.S.-China Trade?

Did you hear the buzz this week? Everyone’s talking about the possibility of U.S. President Donald Trump and Chinese President Xi Jinping finally having that much-anticipated phone call. Kevin Hassett, the White House National Economic Council Director, went on ABC News and confidently stated he expects Trump and Xi to have what he called a 'wonderful conversation' about trade negotiations. But is this optimism justified, or just more political theater? Let’s dive into what’s really happening behind the scenes and why this call could shape the next chapter of global trade.

Why Are Tensions So High Right Now?

You might wonder, why all the drama? Just last month, Trump and Xi’s teams struck a 90-day truce in Geneva, pausing triple-digit tariffs that had both economies—and the world—on edge. The U.S. dropped tariffs on Chinese imports from a staggering 145% to 30%, while China lowered its duties from 125% to 10%. But the peace didn’t last long. Last Friday, Trump accused Beijing of backtracking on the deal, especially on rare earth exports vital for everything from electric cars to smartphones. China shot back, calling Trump’s claims groundless and blaming the U.S. for imposing new restrictions on microchips and student visas. Sound familiar? It’s the classic blame game, but with trillions of dollars at stake.

What’s Kevin Hassett Really Saying?

Hassett’s recent interviews have been a masterclass in cautious optimism. He insists that both sides are 'willing to talk' and that U.S. and Chinese negotiators are in daily contact. But when pressed for a date, he admits there’s nothing on the calendar yet. Treasury Secretary Scott Bessent echoed this, saying on CBS’s Face the Nation that he believes a Trump-Xi call will happen 'very soon.' Commerce Secretary Howard Lutnick chimed in too, accusing China of 'slow-rolling' the deal and warning that the U.S. is taking countermeasures. The message? Both sides want to look tough at home, but neither wants to be blamed for a global economic meltdown.

Rare Earths and Steel: The New Battlegrounds

Let’s talk specifics. Rare earth minerals have become the latest flashpoint. The U.S. claims China is dragging its feet on export licenses, threatening supply chains for everything from semiconductors to fighter jets. China, meanwhile, says it’s the U.S. that’s undermining the deal by tightening chip export controls and revoking student visas. And just to up the ante, Trump announced he’s doubling tariffs on steel and aluminum to 50% starting June 4. The European Union is already threatening retaliation. If you’re in manufacturing or tech, you’re probably holding your breath right now.

Market Reaction: Volatility and Uncertainty

How are investors reacting? Not surprisingly, markets are jittery. The initial Geneva truce had sparked a rebound in consumer and CEO confidence, with stock indices climbing as hope for a deal grew. But Trump’s latest accusations and tariff hikes sent shockwaves through global markets. Steel and aluminum stocks surged briefly on tariff news, while tech and manufacturing shares dipped amid fears of supply chain disruptions. The daily price swings are a stark reminder: when the world’s two largest economies argue, everyone feels it.

Political Theater or Real Progress?

So, is all this just political posturing, or are we on the verge of a breakthrough? Some analysts believe both sides are under pressure to show progress—Trump wants to look tough ahead of the U.S. election, while Xi needs to maintain economic stability at home. The fact that negotiators are still talking daily is a good sign. But as Hassett admitted, 'you never know in international relations.' The real test will be whether Trump and Xi can move past the blame game and hammer out a lasting deal.

What Should Investors and Businesses Watch For?

If you’re an investor or business leader, keep a close eye on the timing and outcome of the Trump-Xi call. A positive outcome could mean lower tariffs, smoother supply chains, and a relief rally in global markets. A breakdown, on the other hand, could trigger more tit-for-tat tariffs and even broader economic fallout. Watch for signals from both governments—especially any changes in export controls, visa policies, or court rulings on tariffs. In this high-stakes game, even a single tweet or press release can move billions.

The Cultural Context: Why This Matters Globally

It’s not just about economics. The U.S.-China trade relationship is a symbol of the broader struggle for global influence. For many in Asia, Europe, and beyond, the outcome of these talks will shape everything from tech innovation to geopolitical alliances. In both countries, leaders are balancing domestic politics, economic realities, and the need to avoid a full-blown trade war. The cultural context—pride, face-saving, and strategic patience—plays a huge role in how negotiations unfold.

Looking Ahead: Will the Call Happen, and What’s Next?

So, will Trump and Xi actually talk this week? The consensus among top advisers like Hassett and Bessent is yes, but with a healthy dose of uncertainty. Both sides have reasons to make a deal, but also plenty of incentives to play tough. For now, expect more headlines, more volatility, and a lot of behind-the-scenes bargaining. One thing’s for sure: the world will be watching every word, every move, and every market tick. Have you ever seen a trade drama quite like this?