• Treasury Secretary Scott Bessent said Washington is fine with either continuing the existing 'Busan arrangement' or examining a bigger deal with China.
  • The remarks came after a meeting with Chinese Vice Premier He Lifeng in New York ahead of a planned Trump-Xi summit.
  • The current tariff truce is set to expire on November 10, and both sides appear motivated to avoid a return to escalation.

Bessent's Flexible Stance

Treasury Secretary Scott Bessent said the United States is open to either extending the current tariff truce with China or negotiating a more comprehensive agreement, following a meeting with Chinese Vice Premier He Lifeng in New York. The talks, held at JPMorgan Chase (JPM)'s offices, were described by Bessent as successful, and he indicated that stability has improved since the prior agreement.

"We're fine with either continuing the Busan arrangement or examining a bigger deal," Bessent told reporters after the meeting. The immediate priority, according to people familiar with the matter, is to prevent the tariff-and-retaliation cycle from restarting as the current truce approaches its November 10 expiry.

What's on the Table

The discussions covered a range of issues beyond tariffs. According to a Treasury readout, the two sides discussed maintaining or extending the tariff truce established after the Busan meeting, Chinese supplies of rare-earth magnets and other critical minerals, potential tariff reductions on non-strategic goods through a proposed bilateral "Board of Trade," and a new U.S.-China AI dialogue that could include a notification channel for major AI incidents with national-security implications.

The Busan framework, agreed earlier this year, reportedly reduced the risk of a full-scale trade escalation after tariffs had briefly risen to triple-digit levels. Under the arrangement, U.S. tariffs on Chinese goods were capped at roughly 20 percent, while China committed to measures including greater purchases of U.S. farm products and improved access to critical minerals. The agreement is due to lapse on November 10 unless renewed.

Economic Stakes

The economic implications of the talks extend beyond bilateral trade. A continued truce reduces the probability of another tariff-led price shock for U.S. consumers and businesses, while a breakdown could tighten global supply chains and unsettle commodity and technology markets. Reports ahead of the talks cited Chinese pledges to increase annual U.S. agricultural purchases by $17 billion, a potential boost for American farmers.

Critical minerals remain a key sticking point. Chinese supply is central to magnets, electric vehicles, electronics, and defense-related supply chains. Better flows would ease a strategic industrial bottleneck, but disruptions would revive supply-chain risks. The prospective AI notification mechanism is notable because it creates a narrow area of cooperation in a domain otherwise defined by intense rivalry over chips, models, and data.

Political and Diplomatic Context

The U.S. and China remain strategic competitors even while seeking to contain commercial conflict. Washington's stated concerns include China's economic imbalances, trade practices, national security, and counternarcotics cooperation. The current negotiations are tied directly to high-level diplomacy, with the Bessent-He talks intended to prepare deliverables for President Donald Trump and President Xi Jinping.

Analysts cited by Reuters cautioned that limited preparation time reduces the likelihood of a sweeping breakthrough, even though both parties want tensions contained. The key test is implementation. If China delivers tangible mineral supplies and agricultural purchases, while the United States offers predictable tariff treatment, the arrangement could evolve into a more durable managed-competition framework. If commitments are judged incomplete—as U.S. officials have already suggested—tariff threats and strategic decoupling pressures could quickly return.