US Treasury's Bessent, China's He launch talks on AI, trade and critical minerals

US Treasury Secretary Scott Bessent and China's Vice Premier He Lifeng traveled to New York on Sunday to prepare for upcoming talks on artificial intelligence, trade, and critical minerals during a high-stakes summit with US President Donald Trump and Chinese President Xi Jinping. The discussions took place at JP Morgan Chase's headquarters in Manhattan, with US Trade Representative Jamie Shannon Greer joining the meeting.

Bessent expressed enthusiasm for "focused, fulsome, and constructive" conversations to pave the way for the upcoming summit. Key topics under discussion included a US-China trade truce set to expire on November 10, the need for more Chinese rare-earth magnets and critical minerals, and potential guidelines for artificial intelligence after reports of security breaches.

Analysts predict that Washington and Beijing will likely reach small agreements to maintain a delicate trade relationship, with few breakthroughs expected. The talks follow a pattern of meetings between Bessent, He, and Greer over the past 16 months, aiming to address issues from the leaders' May meeting in Beijing, such as reducing tariffs on non-strategic goods and increasing US agricultural purchases and aircraft imports.

These efforts mirror previous truces, like the one reached in Busan, South Korea, which capped US tariffs on Chinese goods at around 20%. The US Supreme Court later invalidated the Trump tariffs, replaced with new ones under different authorities. China's performance in delivering critical minerals has been insufficient, a topic to be discussed before the Trump-Xi summit.

AI discussions with Bessent and He are significant, as both nations are leading forces in AI development and global adoption, with rare earths crucial for advanced semiconductor technology. Bessent expressed openness to discussing AI "guard rails" to prevent powerful models from falling into the hands of malign non-state actors.