With data from 15 species in eight families of tropical dry forest trees, we provide evidence of coordination between the stem and leaf economic spectra. Species with low‐density, flexible, breakable, hydraulically efficient but cavitationally vulnerable wood shed their leaves rapidly in response to drought and had low leaf mass per area and dry mass content. In contrast, species with the opposite xylem syndrome shed their costlier but more drought‐resistant leaves late in the dry season. Our results explain variation in the timing of leaf shedding in tropical dry forests: selection eliminates combinations such as low‐productivity leaves atop highly vulnerable xylem or water‐greedy leaves supplied by xylem of low conductive efficiency. Across biomes, rather than a fundamental trade‐off underlying a single axis of trait covariation, the relationship between leaf and stem economics is likely to occupy a wide space in which multiple combinations are possible.