US and China Discuss Tariff Cuts on $30 Billion in Trade Before Trump Hosts Xi

Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng opened talks at JPMorgan Chase's Manhattan headquarters on Sunday, four days before President Trump hosts President Xi Jinping at the White House for a summit that includes a state dinner, according to Al Jazeera. U.S. Trade Representative Jamieson Greer joined the session, the latest in a string of meetings between the three officials over the past 16 months aimed at settling disputes before the two leaders meet face to face.

At the center of the talks is a trade truce that expires November 10. The agreement, struck in Busan, South Korea, last November, capped U.S. tariffs on Chinese goods at about 20 percent after a tit-for-tat fight had briefly pushed rates into the triple digits. Negotiators are now discussing cutting tariffs on roughly $30 billion of trade, including American energy and agricultural exports, and applying most-favored-nation rates to some Chinese goods, according to The Spokesman-Review, which cited Bloomberg News reporting on people familiar with the talks.

“I'm looking forward to having focused, fulsome and constructive talks today that will set the stage for our leaders' meeting," Bessent told reporters as he arrived Sunday.”

AI joins the agenda

Artificial intelligence has joined trade and critical minerals as a formal agenda item, a shift from past rounds. Bessent said the two sides could discuss AI "guardrails" meant to keep powerful models out of the hands of malign non-state actors, covering both open- and closed-weight systems. Chinese open-weight models have drawn interest from U.S. companies partly because they cost less than closed systems built by firms such as OpenAI and Anthropic. "The United States remains the leader in AI," Bessent said. "And we are open to discussions on avoiding shared risks and avoiding bifurcation of our two systems."

Where the two sides still do not agree

The friction points have not gone away. China promised last year's truce would restore the flow of rare-earth magnets and other critical minerals that U.S. automakers and chipmakers depend on, but a senior U.S. official said Friday that Beijing's performance had "not been up to par." China is also one of Iran's largest oil customers, which puts Beijing in Washington's crosshairs as the administration tries to squeeze Tehran economically seven months into the U.S.-Israel war with Iran.

Analysts are not expecting a 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," said Anna Ashton, a China trade analyst and founder of Ashton Intelligence, in comments to Reuters carried by Al Jazeera. "I think status quo is probably both sides' general best expectation."

Former Deputy Secretary of State Kurt Campbell offered a similarly modest bar for success. "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 said.

A packed agenda, a modest bar

That gap between the agenda and the expectations is the story here. Trade truces, AI guardrails, rare-earth flows and Iran policy are all on the table for a single set of meetings ahead of a summit four days out, and the people closest to the negotiations are describing success as avoiding a step backward rather than reaching a new deal. A one-year truce extension would remove one source of uncertainty for a global economy already dealing with wars in Iran and Ukraine and rising oil prices. It would not resolve the underlying disputes over technology and minerals that neither side has moved on in sixteen months of talks.