• Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng agreed to formalize an AI-safety dialogue, a modest confidence-building step before the Trump–Xi summit on September 24.
  • The talks in New York left critical economic questions unresolved: extending the November 10 tariff truce and securing Chinese rare-earth supplies remain open.
  • Officials plan another AI meeting in Shenzhen in about two months, but no final deal on tariffs or minerals emerged.

A Fragile Truce

Treasury Secretary Scott Bessent met with Chinese Vice Premier He Lifeng in New York on September 20, part of a high-level push to stabilize U.S.–China economic relations ahead of President Donald Trump’s planned summit with President Xi Jinping in Washington on September 24. The meeting produced a concrete if narrow outcome: an agreement to formalize an AI-safety dialogue and pursue an “incident line” for serious AI-related events, according to officials familiar with the matter.

Bessent, joined by U.S. Trade Representative Jamieson Greer, described the talks as successful. “We discussed creating a U.S.–China AI Dialogue, including a notification mechanism for AI incidents with national-security implications,” he told reporters. An official said the next AI-safety meeting is expected in roughly two months in Shenzhen, China.

But the core economic disputes remain unresolved. The tariff truce, which capped U.S. tariffs on Chinese goods at about 20%, is set to expire on November 10. Without an extension, duties could snap back to punishing levels, renewing uncertainty for exporters, manufacturers, and retailers. The two sides also failed to bridge differences over Chinese rare-earth magnet and critical-mineral deliveries, and no agreement was reached on selective tariff reductions for non-sensitive goods.

Rare Earths and Tariff Risk Loom

Markets are likely to focus on the November 10 deadline. An extension would lower the risk of abrupt import-cost increases and inflation pressure, while failure could reignite volatility across supply chains. U.S. officials have floated the possibility of a mutual tariff reduction covering about $30 billion in goods, but no specifics emerged from the Bessent–He meeting.

China’s leverage over rare earths is substantial. According to Reuters, the country accounts for up to 70% of global rare-earth mining, 85% of refining capacity, and about 90% of rare-earth metal-alloy and magnet production. These inputs are vital for electric vehicles, electronics, aerospace, semiconductors, and defense production. Washington has pressed Beijing to improve deliveries, but no public commitment was made.

Agricultural products, especially soybeans, and energy trade remain bargaining chips. U.S. officials have suggested possible announcements on agriculture and non-tariff barriers, but details are scarce. The meeting’s modest AI outcome contrasts sharply with the unresolved trade questions, underscoring that this is managed competition rather than reconciliation.

What’s Next

The September 24 summit will be judged on whether it prevents a renewed tariff escalation and delivers credible implementation mechanisms. The AI dialogue, while welcome, is a narrow confidence-building step—not a comprehensive technology agreement. Its practical value will depend on participation, reporting requirements, and verification procedures.

Beijing has pressed Washington to soften rules limiting Chinese companies’ access to advanced U.S. technology. Washington seeks more reliable rare-earth flows. Neither side has publicly budged on these core issues.

“Institutional investors are focused on regulatory stability,” Bessent said, echoing concerns that have grown since the tariff conflict briefly pushed duties into triple-digit territory. A truce reached in Busan, South Korea, last October paired lower U.S. tariffs with Chinese commitments on fentanyl-precursor controls, soybean purchases, and a pause in rare-earth export restrictions. Implementation frictions have persisted.

Efforts to reach spokespeople for the Treasury Department and the Chinese Embassy for comment were unsuccessful.

Correction: An earlier version of this article misstated the date of the Bessent–He meeting. It took place on September 20, not September 19.