Tariff Relief in Sight as Leaders Prepare to Meet
Washington and Beijing are negotiating reductions in tariffs on a range of goods, including American energy and agricultural products, as they lay the groundwork for a summit between President Donald Trump and Xi Jinping scheduled for Sept. 24 in Washington. Treasury Secretary Scott Bessent said Tuesday that he will meet Chinese Vice Premier He Lifeng this weekend, ahead of the leaders' meeting. Bloomberg News reported that the two sides are discussing lower duties on certain goods, and people familiar with the matter said next week's talks are also likely to produce an agreement to cut tariffs on Chinese inputs used by manufacturers.[S1]
The planned reductions would be implemented under an earlier framework for reciprocal tariff cuts covering roughly $30 billion in trade, according to people who requested anonymity to discuss private conversations. Some items from China would receive most-favored-nation rates. Extending the one-year trade truce would eliminate one potential obstacle for a global economy already contending with wars in Iran and Ukraine, elevated oil prices and renewed inflation concerns that are driving up borrowing costs worldwide. Even so, expectations for the summit remain restrained because of China's ties to Iran and Russia and competition over advanced technologies such as artificial intelligence.[S1]
AI Competition and Iran Sanctions Loom Over Talks
Testifying to the House Financial Services Committee, Bessent indicated he was eager to take up Iran-war sanctions with China's vice premier, as Washington ratchets up economic pressure on Tehran. The Treasury chief has repeatedly underscored the need for the U.S. to stay ahead of China in artificial intelligence, where Chinese firms have been narrowing the distance to their Silicon Valley rivals. Bessent argued it makes a difference which side holds this technology, and said that as the official handling the China AI relationship, the question weighs heavily on him.[S1]
Rivalry in AI has turned into a significant point of contention. Three U.S. national security agencies alleged last week that Chinese AI developers, among them DeepSeek and Moonshot AI, which makes the Kimi K3 model, had been methodically pulling proprietary know-how out of American firms. The Chinese companies have stayed silent on the claims, while Beijing has responded sharply. Chinese officials likewise dismissed as fearmongering the appeals by top U.S. AI developers Anthropic PBC and OpenAI to slow work on advanced models, hinting at worries that American companies may be lobbying the Trump administration to tighten China's access to cutting-edge chips and other hardware.[S1]
Summit Logistics and Business Delegation
These senior-level discussions offer the newest sign that the encounter between the leaders of the two biggest economies is still on course. Trump has stated that Xi would come to the White House on Sept. 24, with a state dinner planned. Beijing has not verified any dates for Xi's trip, something it normally does just days beforehand. Bessent gave no date or venue for his meeting with He. The Financial Times said the two would meet Sunday in New York. The pair have typically gotten together ahead of each U.S.-China leaders' summit to lay the groundwork.[S1]
Farming is set to figure prominently in the talks. People from the state-owned food trading company Cofco could accompany Xi on his U.S. trip, two people with knowledge of the plans said. Over a dozen companies are also under consideration for a CEO delegation, although no final call has been made, those people added. During his May state visit, Trump took more than a dozen chief executives to China, among them Nvidia Corp.'s Jensen Huang and Tesla Inc.'s Elon Musk. The executives sat down with Premier Li Qiang, and Xi told them U.S. businesses are deeply engaged in China's reform and opening up, a process that has benefited both sides.[S1]
