WASHINGTON—President Donald Trump’s decision to back down on his threat to overturn a cornerstone of U.S.-China relations was made before his call this week to counterpart Xi Jinping, part of a move toward continuity in Washington’s approach to Asia.

Mr. Trump and Mr. Xi weren’t five minutes into their phone call Thursday night when the issue of the new administration’s threat to tear up the longstanding U.S. agreement with China to withhold diplomatic recognition of Taiwan was put to rest, said a senior U.S. official.

...