Bessent and He to Meet in New York Ahead of Trump-Xi Washington Summit

US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will hold talks in New York on Sunday, setting the stage for a meeting between President Donald Trump and Chinese President Xi Jinping in Washington on September 24.

The discussions are expected to cover trade, tariffs, artificial intelligence, rare earths and broader economic ties, with the conflict involving Iran and its effect on energy supplies emerging as an additional point of pressure. US Trade Representative Jamieson Greer is also expected to take part.

Trade and tariffs

A central focus will be the tariff truce between the two economies, which is due to expire in November. Washington and Beijing are examining how to keep the existing arrangement in place and possibly extend it, while also working on lowering duties on selected non-sensitive goods such as energy and agricultural products.

Proposed new US tariffs tied to Chinese industrial overcapacity and forced-labour concerns could also come up. For Washington, a near-term priority is securing more market access for American businesses, farmers and manufacturers, alongside monitoring how China implements commitments already made.

Artificial intelligence

AI has become a significant new arena of competition. Bessent has said the US is open to talks with China on shared AI risks and on avoiding a split between the two countries' technology systems. His discussions with He are expected to touch on both open-weight and closed-weight AI models, as well as possible safeguards against misuse.

The two sides remain at odds over advanced chips, AI technology and allegations of technology copying. Washington has restricted China's access to some advanced semiconductor technology, while Beijing has criticised US efforts to constrain its technological development.

Rare earths and critical minerals

Rare earths are another key bargaining point. China is a major supplier of rare-earth materials and magnets used in electronics, automobiles, defence equipment and other technologies. Washington is seeking more reliable access, while Beijing has previously used export controls as leverage in trade negotiations.

Supply and export restrictions on rare earths are expected to feature in the Bessent-He talks. The issue carries weight because disruptions to rare-earth magnet supplies can ripple through global manufacturing and technology supply chains.

Iran conflict and China's oil supplies

The conflict involving Iran has added a geopolitical dimension to the discussions. China is a major buyer of Iranian oil, while the Trump administration has stepped up pressure on Tehran and on financial institutions involved in Iranian trade, and is seeking greater Chinese cooperation on sanctions enforcement.

Disruption around the Strait of Hormuz has further complicated matters by affecting energy flows to China and raising concerns about refinery operations. A prolonged interruption to Iranian oil supplies could add to Beijing's energy and economic pressures, while Chinese purchases of Iranian oil remain a major sanctions concern for Washington.

Fentanyl-related trade

The flow of fentanyl precursor chemicals from China to the US is expected to feature in the wider Trump-Xi discussions, with the two sides due to discuss efforts to curb the trade in chemicals used to manufacture the drug. The issue has figured in previous negotiations and could offer another area for cooperation.

Taiwan and US arms sales

Taiwan is likely to prove a harder issue at the leaders' summit than at the economic talks. Chinese officials have signalled that Taiwan will be a major concern for Beijing, particularly a planned US weapons package for the island. The Trump administration has delayed a major Taiwan arms sale, with Trump previously describing it as a negotiating tool. Beijing strongly opposes US arms sales to Taiwan, while Washington maintains longstanding commitments relating to the island's defence.

Autos and BYD

Chinese electric vehicle maker BYD could also enter the wider discussions. Chinese officials are considering including the company in a business delegation accompanying Xi to Washington. Trump has suggested that Chinese automakers could potentially manufacture vehicles in the US if they employ American workers. The issue arises amid US tariffs and broader concerns in Washington about Chinese industrial capacity and the competitiveness of Chinese electric vehicles.