Trump, Xi discuss Taiwan and soybeans in call aimed at easing China, US relations

In a goodwill gesture two months before Trump's expected visit to Beijing, Trump said Xi would consider hiking soybean purchases from the United States to 20 million metric tons in the current season, up from 12 million tons previously. Soybean futures rallied.

Hours after Xi's virtual meeting with Russian President Vladimir Putin, Xi and Trump discussed Taiwan and a wide range of trade and security issues that remain a source of tension between the world's two biggest economies. Both leaders publicly affirmed their personal stakes in strong relations after the call, their first since November.

Trump said on Truth Social that the call was "all very positive," that his relationship with Xi is "extremely good," and that "we both realize how important it is to keep it that way." An official Chinese government account said that Xi had said, "I attach great importance to Sino-U.S. relations."

Though Trump has tagged China as the reason for several hawkish policy steps from Canada to Greenland and Venezuela, he has eased policy toward Beijing in the past several months in key areas, from tariffs to advanced computer chips and drones.

"Both sides are signalling that they want to preserve stability in the U.S.-China relationship," said Bonnie Glaser of the German Marshall Fund of the United States, a think tank.

AREAS OF TENSION AND GOODWILL GESTURES

One area of tension is Taiwan policy. The United States announced its largest-ever arms sales deal with Taiwan in December, including $11.1 billion in weapons that could ostensibly be used to defend against a Chinese attack. Taiwan expects more such sales.

China views Taiwan as its own territory, a position Taipei rejects. The United States has formal diplomatic ties with China, but maintains unofficial ties with Taiwan and is the island's most important arms supplier. The United States is bound by law to provide Taiwan with the means to defend itself.

"The United States must carefully handle arms sales to Taiwan," China said in an official meeting summary.

Investigations into senior military leaders in China have stirred concern about the implications for Chinese foreign policy. Trump downplayed the investigation into Central Military Commission Vice-Chairman Zhang Youxia, saying over the weekend that "as far as I'm concerned, there's one boss in China," and "that's President Xi."

The last nuclear treaty between Russia and the United States is soon to expire, raising the risk of a new arms race in which China would also play a key role with its own growing nuclear stockpile. Trump has said that he wants China to be part of arms control.

SOYBEANS, AIRPLANES AND OIL

Economic issues continue to be a flashpoint between the world's biggest consumer and its biggest factory. Trump has made tariffs on imports a pillar of his strategy to revive domestic manufacturing jobs. U.S. Vice President JD Vance on Wednesday unveiled plans for a preferential trade bloc of allies for critical minerals, part of an effort to eliminate leverage that China has over the United States because of its control of key metals.

The two sides are working to find areas of accord heading into an expected April state visit by Trump to Beijing. Trump and Xi last met in person in October in South Korea, where their current trade truce was struck.

Soybeans are key because struggling U.S. farmers are a major domestic political constituency for Trump, and China is the top consumer. Overseas sales of U.S. soybeans this year slumped to the lowest in 14 years due to trade tensions with China. Benchmark Chicago Board of Trade soybean futures surged more than 3% to a two-month high.

U.S. supplies are not sufficient to export another 8 million tons to China while also meeting expected demand from other importers, said Arlan Suderman, chief commodities economist for StoneX, a consultancy. U.S. soybean prices could rise and some U.S. and international buyers could satisfy demand by buying soybeans from Brazil instead, he said.

China's commerce ministry did not immediately respond to a Reuters request for comment on the possibility of soybean purchases.

U.S. Representative Ro Khanna, a Democrat who sits on a committee focused on China, criticized Trump's dealmaking.

"He points to China's soybean buying as proof of progress, despite volumes still trailing where they stood before he took office," Khanna said in a statement. "He says nothing about China's aggression towards Taiwan, support for Putin's invasion of Ukraine or human rights abuses."

In addition to soybeans, the U.S. and Chinese leaders discussed Iran, Russia's war in Ukraine, airplane engines and oil and gas, Trump said.

China has been Venezuela's top oil buyer for years, and the sales helped Caracas repay massive loans to Beijing in debt-for-oil deals. The United States removed President Nicolas Maduro last month, and it has suggested that China will have to buy Venezuelan oil on U.S. terms.