Wolfe Research said the latest call between U.S. President Donald Trump and Chinese President Xi Jinping underscored a thaw in relations but cautioned that tariff relief is unlikely in the near term.

The firm described the September 19 call as the capstone to "a week of positive noises on the US-China relationship," with both sides issuing upbeat readouts.

Trump highlighted Xi's approval of the TikTok deal framework and "productive" talks on trade, fentanyl, and Russia-Ukraine. Beijing's statement was "pragmatic, positive, and constructive" but also warned that "the US side should avoid taking unilateral trade-restrictive measures."

Wolfe Research wrote that Trump "is in dealmaking/de-escalation mode with China," noting the President is portraying progress despite little movement on key issues such as soybean purchases or fentanyl restrictions.

On TikTok, the U.S. appears willing to accept continued Chinese ownership of the algorithm, while China did not secure relief from existing tariffs or export controls.

The research house highlighted a shift in Washington's internal balance, with doves gaining ground after Trump withdrew the nomination of China hawk Landon Heid to head the Commerce Department's export control office.

Wolfe Research described this as "the Jensen Huangification of US export control policy," aimed at keeping China "addicted to the US tech stack."

Still, fentanyl tariffs remain a sticking point, and Wolfe Research stressed that "we wouldn't count on tariff relief any time soon."

The analysts concluded: "We suspect further tariff easing is coming no earlier than Trump's visit to China in early 2026, at best."

Source: Investing.com