US, China to discuss AI, trade, and rare earths ahead of Trump-Xi summit

U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng have launched high-level economic talks in Manhattan, New York, to lay the groundwork for a forthcoming presidential summit between Donald Trump and Xi Jinping.

The talks aim to address the expiring U.S.-China trade truce set for November, evaluate targeted tariff reductions on non-sensitive goods, and monitor past commitments on agricultural purchases.

As reported by Reuters, Washington is pushing for more reliable access to rare-earth magnets and critical materials, amid ongoing friction over export controls, supply chain security and potential guard rails for artificial intelligence after reports of key security breaches involving AI models

The discussion also aim to prevent system bifurcation, and managing shared risks for both open-weight and closed-weight AI models.

U.S. trade representative Jamieson Greer is also participating in the discussions as both sides look to finalize deliverables ahead of the Washington leaders'summit.

The most likely outcome, analysts say, would be for Washington and Beijing to ​agree on small steps to show they are continuing to avoid escalating tensions in a delicate trade relationship that has major consequences for the global economy.

Trump's administration has been rebuilding them ​under new authorities, including restoring a 12.5% tariff on Chinese goods over forced labor allegations. 

As reported, it is finalizing a separate tariff investigation aimed at curbing excess industrial capacity that it says is rampant in China.

Why it matters?

The Bessent-He-Greer meeting follows a pattern set over the past 16 months, in which the three officials met in European and Asian cities to tee up potential agreements for Trump and Xi.

The efforts included the November 2025 truce reached in Busan, South Korea, which capped US tariffs imposed during Trump's second term in office at about 20% on Chinese goods after tit-for-tat escalation had brought ​them to triple-digit levels on both sides.

Under that truce, China ‌promised to restore ⁠the flow of critical minerals to US and global users. However, a senior US official told reporters on Friday that China's performance on that front "has not been up to par" and would be a topic for discussion ahead of the Trump-Xi summit.

The Bessent-He discussions on AI are significant because the US and China are the two major forces driving development of advanced AI tools and the global adoption of the technology. 

While Rare earths play a crucial role in the manufacturing of advanced semiconductor technology powering AI.