Trump, China’s Xi hold call on TikTok, trade, Taiwan

By Doina Chiacu, Michael Martina and Yukun Zhang

WASHINGTON (Reuters) -U.S. President-elect Donald Trump and Chinese President Xi Jinping discussed issues including TikTok, trade and Taiwan in a phone call on Friday, just days before Trump takes office again promising tariffs that could ratchet up tensions between the world’s two biggest economies.

Both leaders were upbeat about the call, with Trump calling it “a very good one” and Xi saying he and Trump both hoped for a positive start to U.S.-China relations, according to Chinese state broadcaster CCTV.

It was the first known phone call between the pair after Trump’s election in November.

The U.S. and China are embroiled in an array of diplomatic and economic disagreements, including an accelerating technological and military rivalry and bitter trade disputes. Marco Rubio, Trump’s nominee to be his secretary of state, has defined China as the gravest threat facing the U.S. and warned about the risks of possible military conflict between the two countries.

The call came shortly before U.S. Supreme Court on Friday announced a ruling upholding a law that mandates TikTok owner ByteDance divest TikTok’s U.S. assets by Sunday to a non-Chinese buyer, or be banned on national security concerns.

“The call was a very good one for both China and the U.S.A. It is my expectation that we will solve many problems together, and starting immediately. We discussed balancing Trade, Fentanyl, TikTok, and many other subjects,” Trump wrote on his social media platform.

“President Xi and I will do everything possible to make the World more peaceful and safe!”

Xi raised China’s concerns about Taiwan, which Beijing maintains is part of its territory, and said he hoped the U.S. would treat the matter with great care.

“The Taiwan issue concerns China’s national sovereignty and territorial integrity, and he hopes the U.S. side will handle it with caution,” he said according to Chinese state television.

Xi said the United States and China can have their differences but must respect each other’s core interests, and that trade relations can be mutually beneficial without confrontation and conflict, comments similar to those he made during Trump’s first term.

The Chinese readout of the call said the two leaders agreed to set up a “channel of strategic communication to keep in regular touch on major issues of shared interest.”

Trump offered strong support to Taiwan, including regularizing arms sales, in his first term. But during the campaign last year, he said Taiwan should pay the U.S. to be defended.

The Republican president-elect, who upended trade relations in his first term, is about to embark on an even more aggressive effort in his second term. He has pledged to impose an additional 10% tariff on Chinese goods unless Beijing does more to stop trafficking of the highly addictive narcotic fentanyl, and he threatened tariffs in excess of 60% on Chinese goods while on the campaign trail.

Trump said on Jan. 6 that he and Xi have been communicating through representatives, expressing optimism about their relationship.

Zack Cooper, a senior fellow at the American Enterprise Institute think tank, said whether Trump in coming days would permit TikTok to operate without a qualified divestment and whether he applied tariffs on China quickly or first began negotiations with Beijing would be early indicators of how confrontational his stance toward China would be.

Trump posted online later that his decision on TikTok would be coming soon, and that “everyone must respect” the Supreme Court ruling.

Breaking with tradition, Trump had invited Xi and other foreign leaders to his Jan. 20 inauguration, but China is sending Vice President Han Zheng, a move signaling Beijing’s desire to step up communication with the incoming administration.

Still, any “grand bargain” between the two sides over trade, Taiwan and other strategic issues would be difficult to reach, said Scott Kennedy, a China expert at the Center for Strategic and International Studies think tank in Washington.

“There’s an immense amount of distance between what one can imagine and actually achieving such an outcome. The interests between the U.S. and China on many of these issues are different and the views of key advisors to both are quite hawkish,” Kennedy said.