US, China open high-level talks ahead of Trump-Xi summit

Top economic authorities from China and the United States have begun negotiations in New York City aimed at clearing the way for feasible agreements on trade, artificial intelligence and critical minerals ahead of a gathering between US President Donald Trump and Chinese.

Key points

• Former US Deputy Secretary of State Kurt Campbell similarly remarked the immediate goal may simply be keeping tensions contained.
• At the top of the agenda is a fragile US-China trade truce due to expire on November 10.
• Washington is additionally pressuring Beijing over its supply of rare-earth magnets and other critical minerals, crucial to industries ranging from cars to advanced semiconductors.
• "The United States remains the leader in AI, " Bessent remarked.
• "I'm looking forward to having focused, fulsome and constructive talks today that will set the stage for our leaders' meeting, " Bessent remarked to journalists as he arrived.

US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng began discussions at JPMorgan Chase's Manhattan headquarters on Sunday morning, with US Trade Representative Jamieson Greer additionally taking part.

In practice, the discussions come four days before Trump is due to host Xi at the White House, with both sides looking to ease tensions between the world's two largest economies.

For context, the agreement, reached in Busan, South Korea, last November, capped US tariffs on Chinese goods at regarding 20 percent after a tit-for-tat trade fight briefly pushed tariffs into the triple digits.

China promised to restore the flow of critical minerals under last year's truce, but a senior US official remarked on Friday that Beijing's performance had "not been up to par". AI enters the discussions.

Artificial intelligence (AI) is additionally anticipated to feature prominently, adding a relatively new matter to negotiations long dominated by trade.

Bessent has remarked the countries could discuss AI "guardrails" aimed at addressing shared risks, including preventing powerful models from falling into the hands of malign non-state actors.

Notably, the discussions are anticipated to cover both open- and closed-weight AI models. Chinese open-weight models have increasingly attracted US firms, in part as they can be cheaper than closed systems developed by US firms such as OpenAI and Anthropic.

"The United States remains the leader in AI, " Bessent remarked. "And we are open to discussions on avoiding shared risks and avoiding bifurcation of our two systems."

Another potential point of friction is Iran. China remains one of Tehran's most significant economic partners and buys much of its oil, making Beijing an notable target of Washington's efforts to growth economic pressure on Iran as the US-Israel war on Iran enters its seventh month. Despite the packed agenda, analysts are not expecting a sweeping breakthrough.

"I think there will be some show of deliverables because of the fact that it's a presidential summit coming, but I don't feel like we're on the verge of some sort of breakthrough, " Anna Ashton, a China trade analyst and founder of Ashton Intelligence, informed Reuters. "I think status quo is probably both sides' general best expectation."

"One of the only things we can hope for in the short term is a truce, and that this will likely continue through the remainder of this year, " Campbell remarked.

Sunday's negotiations are part of a series of meetings between Bessent, He and Greer over the past 16 months aimed at hammering out areas of agreement before Trump and Xi meet face to face.

Taken together, the developments around US, China open high-level talks ahead of Trump point to a situation that is still moving, and the coming days should bring more clarity.