US-China Talks Open Toughest Files Before Trump-Xi Summit

US-China talks have entered a new phase in New York as Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng discuss artificial intelligence, trade and critical minerals ahead of an expected meeting between President Donald Trump and Chinese President Xi Jinping in Washington.

The negotiations go well beyond tariffs. The two sides are trying to manage disputes affecting semiconductors, rare-earth supplies, aircraft, agriculture and some of the world’s most advanced artificial intelligence systems.

US-China talks: Why are officials meeting now?

Bessent and He met in New York to prepare for the Trump-Xi summit scheduled for September 24 in Washington.

U.S. Trade Representative Jamieson Greer also joined the talks, which were held at JPMorgan Chase’s Manhattan headquarters.

A central objective is preventing renewed trade escalation before the current U.S.-China trade truce expires on November 10.

Officials and analysts are not expecting a sweeping agreement from the preparatory talks, but smaller deals could give Trump and Xi concrete progress to announce when they meet.

Artificial intelligence moves to the center

Artificial intelligence has emerged as one of the most significant additions to the economic dialogue.

Reuters reported that officials are exploring possible guardrails around advanced AI systems, including open- and closed-weight models.

The discussions include risks involving increasingly capable or self-improving systems and potential dual-use applications related to biological or nuclear weapons.

Shared concerns about AI risks do not remove the broader technological rivalry, however. Washington and Beijing remain divided over advanced semiconductor access, technology restrictions and the use of American AI capabilities by Chinese companies.

Rare earths become a strategic bargaining point

Critical minerals and rare-earth supplies are another central issue.

These materials are essential to sectors including semiconductors, electric vehicles, energy systems and defense manufacturing.

Washington wants more predictable access to Chinese critical minerals and rare-earth magnets after export restrictions made the sector an increasingly powerful source of leverage in bilateral trade relations.

For global businesses, a more stable arrangement could reduce supply-chain risks for technology and manufacturing companies.

Tariffs return to the negotiating table

Trade officials are also discussing possible reductions in tariffs on goods that are not considered strategically sensitive, according to Reuters.

Washington wants China to increase purchases of U.S. goods and reduce long-standing trade imbalances.

Issues carried over from previous negotiations include potential Chinese commitments to increase annual purchases of U.S. agricultural products by about $17 billion and acquire more than 200 Boeing aircraft.

Those items remain subjects of negotiation and should not be treated as completed deals.

Why Wall Street is watching

Changes in U.S.-China relations can affect a wide range of global industries.

Technology companies are watching semiconductor and AI restrictions, automakers are focused on batteries and rare-earth supplies, Boeing is monitoring aircraft negotiations, and American farmers are watching the scale of potential Chinese agricultural purchases.

Markets are also focused on whether Trump and Xi can extend the trade truce beyond November 10 and avoid another round of tariff escalation.

Russia and Iran remain in the background

The coming presidential summit is expected to extend beyond strictly bilateral trade issues.

China’s economic relationship with Iran and the Middle East conflict are likely to be discussed, alongside Russia, Ukraine and Beijing’s commercial ties with Moscow.

Profile News has also covered the new U.S. sanctions law targeting Russia and extending measures against Iran, which could add further complexity to trade and energy relations involving China.

What does Washington want, and what does Beijing want?

The United States is seeking more reliable critical-mineral supplies, increased Chinese purchases of American goods and progress on artificial-intelligence risks while maintaining its technology and national-security safeguards.

Beijing wants relief from U.S. tariffs and technology restrictions and seeks to prevent competition from turning into a broader economic separation between the two countries.

Reuters reported that simply maintaining stability and avoiding another escalation could be viewed as meaningful progress even without a major trade agreement.

September 24 becomes the key date

Attention now shifts to Trump’s meeting with Xi in Washington, their second summit this year.

The agenda is expected to range from trade, artificial intelligence and critical minerals to Taiwan, Iran and efforts to curb shipments of chemicals used to produce fentanyl.

The New York negotiations therefore represent more than another round of trade talks: they are an attempt to prepare agreements and manage disputes that could influence global technology, manufacturing and financial markets for months to come.

Report Sources: Reuters — U.S.-China economic talks, Reuters — Trump-Xi summit agenda, Reuters — U.S.-China AI rivalry.