China's Xi reasserts Taiwan stance in call with Trump, while U.S. president pushes trade

WASHINGTON – A high-stakes phone call between U.S. President Donald Trump and Chinese President Xi Jinping on Wednesday laid bare the dueling priorities of the world's two largest economies, with Trump championing a transactional, trade-focused agenda ahead of a planned state visit, while Xi drew a firm line on the sovereignty flashpoint of Taiwan.

The discussion, described by President Trump as "long and thorough," sets a complex stage for his upcoming trip to Beijing in April, where a potential multi-billion dollar aviation deal could hang in the balance against deep-seated geopolitical tensions.

Dueling Readouts Highlight Divergent Focus

The official summaries of the call released by Washington and Beijing painted starkly different pictures, underscoring the fundamental divergence in their strategic objectives.

President Trump highlighted a broad, business-centric agenda. His public comments focused on the commercial relationship, including China's energy purchases and agricultural imports, alongside global security issues like Iran and Russia's war in Ukraine.

Beijing’s statement, in contrast, was laser-focused on what it deems a non-negotiable sovereign issue. It singled out Taiwan as "the most important issue" in the U.S.-China relationship, a clear and forceful message delivered just months after a significant U.S. arms package to the island.

The Taiwan Flashpoint

China's emphasis on Taiwan appears to be a direct response to recent U.S. policy and a strategic move to set the terms of engagement before Trump's visit.

• The Core Issue: Beijing considers the democratically governed island of Taiwan a breakaway province to be reunified, by force if necessary. This claim is rejected by Taiwan's government.

• A Massive Arms Deal: In December of last year, the White House approved one of the largest-ever arms sales to Taiwan, a package worth up to $11.15 billion. The deal is intended to bolster the island's self-defense capabilities and act as a deterrent to potential military action from the mainland.

• Setting 'Red Lines': Beijing's statement explicitly urged the U.S. to "handle the issue of arms sales to Taiwan with prudence." According to David Meale, head of the China practice at Eurasia Group, this messaging is designed to remind Washington "where the red lines are" without derailing the diplomatic goodwill needed for a successful presidential visit.

A 'Grand Bargain' in the Making?

For his part, President Trump is pursuing a series of major commercial deals, positioning them as the centerpiece of a successful summit and a win for American industry and workers. The call advanced several key components of this potential "grand bargain."

• Agriculture Commitments: Trump announced that China has agreed to significantly increase its purchase of American agricultural products. The deal includes 20 million tonnes of soybeans for the current season and a commitment for 25 million tonnes for the next. This would provide a major boost to the U.S. farm belt.

• Aviation's Blockbuster Deal: A massive aircraft order is emerging as the likely "headline victory" of the April trip. U.S. Ambassador to China, David Purdue, reportedly confirmed in a private meeting last month that U.S. aviation giant Boeing was central to ongoing negotiations. Neo Wang, lead China macro analyst at Evercore ISI, anticipates a signing ceremony for a deal covering as many as 500 Boeing aircraft, which would be personally witnessed by Trump and Xi.

• Energy and Tariffs: The talks also touched on increased Chinese purchases of American oil and gas. In return for these large-scale commitments, analysts suggest a U.S. concession is on the table. Wang projects that Trump could agree to remove the remaining 10% tariffs on Chinese exports, which were initially imposed over fentanyl-related concerns, "during or shortly after" the April meeting.

Strategic Calculus and Differing Tones

The leaders' contrasting tones after the call were revealing. Trump portrayed the discussion as "excellent" and praised his "extremely good" personal relationship with Xi, reflecting his focus on deal-making.

Xi, however, adopted a more measured and formal tone. The Chinese readout noted his comment that while "the U.S. has its concerns and China has its concerns," a solution could be found if both sides approached each other with "reciprocity."

This dynamic plays into what some analysts see as a strategic opening for Beijing. "The 'transaction-oriented' mindset of Trump should be a gift to Beijing as opposed to an ideology-driven one reinforced by coalition-building," noted Wang of Evercore ISI. This approach allows China to use economic concessions, which also serve its own domestic needs, to navigate geopolitical pressure points without engaging on more sensitive issues like human rights or democratic values.

What to Watch

The groundwork has now been laid for a consequential summit in April. The coming weeks will be critical as negotiators work to finalize the details of the trade and investment packages.

The central question is whether a transactional relationship, anchored by massive purchases of American goods, can successfully paper over the profound and growing strategic rivalry over Taiwan and regional security.

For markets, the confirmation of a major Boeing order and the removal of tariffs would be a significant positive catalyst. For policymakers, the focus will be on whether the U.S. is securing these economic wins at the cost of long-term strategic leverage in the Indo-Pacific. Both leaders are walking a tightrope, balancing domestic political needs with a bilateral relationship that will define the 21st-century global landscape.