U.S. President Donald Trump is expected to speak with Chinese President Xi Jinping this week.
This is according to White House press secretary Karoline Leavitt.
The call comes at a critical juncture as the two largest economies in the world navigate a volatile trade dispute that could significantly impact global markets.
The discussion will mark the first direct engagement between Trump and Xi since Trump assumed office on January 20.
Their last known conversation took place before Trump’s inauguration, Reuters reported.
“It’ll happen in the next couple of days,” Leavitt confirmed, signaling the administration’s intent to address pressing trade concerns before tariffs on Chinese goods take full effect.
Tariffs on China Remain as Mexico and Canada Get Reprieve
Over the weekend, Trump ordered sweeping tariffs on Mexico, Canada, and China, citing the need to curb the flow of illegal fentanyl, a synthetic opioid responsible for widespread drug overdoses in the U.S.
- However, on Monday, he withdrew the planned tariffs on Mexico and Canada, while maintaining pressure on China.
- Trump had initially imposed a 10% tariff on all Chinese goods, set to take effect on Tuesday. While this was lower than his campaign promise of a 60% tariff on Chinese imports, he warned that this was merely an “opening salvo” in the trade battle.
“China hopefully is going to stop sending us fentanyl, and if they’re not, the tariffs are going to go substantially higher,” Trump stated, reinforcing his administration’s commitment to tougher trade measures if Beijing fails to comply with U.S. demands.
China Signals Openness to Negotiations
While Beijing has long criticized tariffs as counterproductive, its response to the latest measures has been relatively measured.
A Reuters source familiar with the matter suggested that China might be open to negotiating a deal with Trump to delay or halt further tariff escalations.
China has consistently denied claims that it is the main source of fentanyl precursors, arguing that it has implemented stringent regulations to curb illegal drug production. However, the U.S. maintains that Chinese-made chemicals continue to fuel the opioid crisis through Mexican drug cartels.
Market Reactions: Yuan Under Pressure, Investors Cautious
Financial markets have responded to the escalating trade tensions with heightened volatility. The U.S. dollar reached a record high against the offshore Chinese yuan on Monday, reflecting investor uncertainty over the potential economic fallout of prolonged trade hostilities.
Analysts warn that further tariff hikes could exacerbate supply chain disruptions, push inflation higher, and strain global trade networks. Investors are closely watching the upcoming call between Trump and Xi, as any sign of a breakthrough could alleviate market anxieties.
Key Highlights:
- U.S. President Donald Trump to speak with Chinese President Xi Jinping this week amid looming tariff deadlines.
- Trump imposed a 10% tariff on Chinese goods, with potential hikes if China fails to curb fentanyl exports.
- The U.S. dollar hits record highs against the offshore yuan as tensions mount.
