President Donald Trump and Chinese President Xi Jinping engaged in a phone call on Thursday, marking a significant moment amid the ongoing trade tensions between the two nations. The call was initiated at the request of the White House, according to Chinese state media and the Chinese foreign ministry. As of 9 a.m. ET, the call was still in progress, but no further details were immediately disclosed.

This conversation is notable as it is the first known interaction between the two leaders during Trump's second term. They previously spoke in January before Trump’s inauguration. Ahead of the call, Trump expressed his frustrations on social media, stating, "I like President Xi of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!" This tweet came early Wednesday morning, reflecting the complexities of their relationship.

In the wake of the call, U.S. stocks saw a slight increase in pre-market trading, fueled by investor optimism that the dialogue could lead to a de-escalation of trade tensions. The U.S. and China have been embroiled in a trade war since the beginning of Trump's second term, with both countries imposing tariffs on billions of dollars' worth of goods.

Currently, the tariff level on Chinese imports to the U.S. stands at a minimum of 30%, a significant reduction from the punitive rate of 145% that was previously in place. This change followed a handshake agreement in Geneva last month, which also saw China lower its tariffs on U.S. imports from 125% to 10%. However, tensions flared again after Trump accused China of violating the Geneva agreement, prompting a reciprocal accusation from China.

Trump has consistently focused on reducing the trade deficit with China, which measures the difference between U.S. imports from China and exports to the country. Recent data from the Commerce Department revealed a sharp decline in the trade deficit, dropping to $19.7 billion in April, the lowest level since March 2020. This decline is seen as an indication that the new tariffs are beginning to have a significant impact on trade flows.

In addition to the call with Xi, Trump extended an exemption for Chinese-made chips from a 25% tariff that was imposed during his first term. This exemption, which was set to expire, has now been extended to August 31. The administration is also considering whether to impose separate import taxes on semiconductors. Meanwhile, the White House has reached out to trade partners, urging them to finalize trade deals before the expiration of a 90-day pause on Trump’s "reciprocal tariffs" next month.