China and the United States on Wednesday agreed to hold more trade talks in hopes of breaking an impasse over tariffs and global supplies of rare earth minerals, a move that came after the leaders of the two countries had a “very positive” phone conversation.

President Donald Trump said in a post on Truth Social that his call with Xi Jinping, China’s top leader, had lasted for around an hour and a half and had focused entirely on the trade relationship between the two nations, which has been souring in recent months amid a growing dispute over the export of critical minerals used in a wide array of industries.

“I just concluded a very good phone call with President Xi, of China, discussing some of the intricacies of our recently made, and agreed to, trade deal,” Trump said. The call, he added, “resulted in a very positive conclusion for both countries.”

Trump also implied that the two leaders had resolved issues surrounding the exports of rare earth minerals that China had recently halted to the United States, though he did not elaborate. He said his trade team would meet again soon with Chinese officials, in a yet-to-be-determined location, and he said he and Xi had invited each other and their spouses to visit their respective countries.

China’s readout

Chinese state media confirmed the call in a report Thursday, which said the exchange had happened at Trump’s request.

According to the Chinese readout, Xi called for greater cooperation and respect between the countries, and welcomed Trump to visit China. Trump and Xi were last known to have spoken to each other on Jan. 17, days before Trump was inaugurated as president.

Trump said Thursday’s discussion did not touch on matters beyond trade, including the Russia-Ukraine war and the Iran nuclear negotiations.

The call appeared to signal a thaw in the U.S.-China relationship, following several weeks of escalating tensions between the superpowers.

The two countries had reached a tentative trade truce in a meeting in Geneva last month, in which they agreed to roll back tariffs they had placed on each other earlier this year, and remove other trade barriers.

But in recent weeks, they had each accused the other of violating their Geneva agreement. China has continued to restrict exports of rare earth minerals that are essential for U.S. makers of cars, airplanes and defense goods, while the United States has responded by halting exports of American technology and a range of industrial products to China. The Trump administration also proposed a plan to revoke visas for some Chinese students.

On Wednesday, Trump wrote on social media that Xi was “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH.”

Shortages of the minerals, which are used to make powerful industrial magnets, have threatened to bring some American factories to a standstill, including America’s defense industry. China dominates the global market for the minerals and views it as a choke point over the United States.

The White House did not respond to requests for comment.

In early April, Trump raised U.S. levies on Chinese goods to an eye-watering minimum rate of 145% and China retaliated by increasing duties on American imports to 125%. The tit-for-tat moves had effectively cut off trade between the countries and raised concerns about a broader global economic slowdown.

The truce that resulted from the talks saw both sides temporarily reducing the punishing tariffs they imposed on each other for 90 days while negotiators sought a longer-term resolution. China also pledged to suspend or remove what it called “nontariff countermeasures” it had imposed since April, though its public statement did not go into specifics. Trump administration officials said they had expected China to lift restrictions on some rare earth exports.

China has said the rare earth export controls apply to all countries, not just to the United States. The distinction means China can argue that its controls should not be regarded as a countermeasure taken against the United States.

“The Chinese are reluctant to give up their leverage so easily,” said Yun Sun, director of the China program at the Stimson Center in Washington. “They want to wait and see how things go” with trade negotiations.

Trump has suggested on several occasions since returning to the White House that a call or a meeting with Xi was imminent. While Trump would rather speak directly with Xi, Chinese officials generally favor hammering out details in advance of any such call or meeting. And Beijing had been concerned about the possibility that Trump would embarrass Xi during talks, analysts said.

Currency manipulation

Also Trursday, the U.S. declined to label China a currency manipulator in a new Treasury report, but accuses Beijing of standing out among America’s major trading partners for lacking transparency in its exchange rate policies.

Treasury’s semi-annual report to Congress — called Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States— comes as the Trump administration seeks to strike a trade deal with China.

A Treasury official told reporters previewing the report that the U.S. could in the future find evidence that China is manipulating its currency and will make a determination in the fall.

Treasury Secretary Scott Bessent said the administration “has put our trading partners on notice that macroeconomic policies that incentivize an unbalanced trading relationship with the United States will no longer be accepted.”

This report contains information from the Associated Press.