The Bessent-He discussions on AI are significant because the US and China are the two major forces driving development of advanced AI tools and global adoption of the technology. Rare earths play a crucial role in the manufacturing of advanced semiconductor technology powering AI.
Bessent said on Friday that he expects the discussions to cover "both open and closed-weight models". Open-weight models are AI systems with publicly accessible core elements where users can download and fine-tune them for specific tasks.
Chinese open-weight models are becoming more popular with US companies because they can be cheaper than closed-weight AI tools such as those developed by Anthropic, OpenAI and other US companies.
"The United States remains the leader in AI. And we are open to discussions on avoiding shared risks and avoiding bifurcation of our two systems," Bessent said in a statement on the China talks.
Bessent has called for the US and China to agree on AI "guard rails" aimed at keeping powerful models out of the hands of malign non-state actors.
The US and China also agreed in May to launch discussions to reduce tariffs for non-strategic goods under a so-called "Board of Trade" mechanism along with a similar forum to deal with specific investment issues.
While the Trump administration has tightened restrictions on US companies investing in some industries in China, Reuters reported on Friday that it is working on rules likely to allow US pharmaceutical companies to invest in promising Chinese drugs and strike licensing deals for them.
China's Ministry of Commerce said on Saturday that He would also lead a delegation of Chinese companies to the US that would participate in economic and trade consultations ahead of the summit.
The business delegation, which mirrors a group of US CEOs that Trump brought to Beijing in May, was announced as Trump expressed openness to Chinese automakers building US factories.
US auto industry groups on Friday urged Trump to maintain an effective ban on Chinese vehicle sales in the US on national security grounds.
Tariff, mineral and investment talks continue
The Bessent-He-Greer meeting follows a pattern set over the past 16 months, in which the three officials met in European and Asian cities to tee up potential agreements for Trump and Xi.
These efforts included the November 2025 truce reached in Busan, South Korea, which capped US tariffs imposed by Trump on Chinese goods at about 20% after tit-for-tat escalation had brought them to triple-digit levels on both sides.
The US Supreme Court later struck down the Trump tariffs that were invoked under a national emergencies law, including duties related to fentanyl trafficking.
Trump's administration has been rebuilding them under new authorities, including restoration of a 12.5% tariff on Chinese goods over forced labor allegations. It is finalizing a separate tariff investigation aimed at curbing excess industrial capacity that it says is rampant in China.
Under that truce, China promised to restore the flow of critical minerals to US and global users. However, a senior US official told reporters on Friday that China's performance on that front "has not been up to par" and would be a topic for discussion ahead of the Trump-Xi summit.
Bessent and He meet in New York ahead of Trump-Xi summit
US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng arrived in New York on Sunday for a meeting aimed at teeing up potential agreements on AI, tariffs and critical minerals for a high-stakes summit this week between US President Donald Trump and Chinese President Xi Jinping.
The meetings at JP Morgan Chase's JPM.N headquarters in Manhattan, which will also include US Trade Representative Jamieson Greer, started shortly after Bessent's arrival around 10:30 a.m. (1430 GMT) and were expected to run all day.
Before heading into the meeting, Bessent told reporters that he looked forward to "focused, fulsome and constructive talks" that would pave the way for the coming Trump-Xi summit in Washington.
Trade truce, minerals and AI guard rails among key issues
Key topics will be a US-China trade truce that is set to expire on November 10, flows of Chinese rare-earth magnets and critical minerals that US officials say are insufficient and potential guard rails for artificial intelligence after reports of security breaches involving AI models.
The most likely outcome, analysts say, would be for Washington and Beijing to agree on small steps to show they are continuing to avoid escalating tensions in a delicate trade relationship that has major consequences for the global economy.
"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. "I think status quo is probably both sides' general best expectation."
Many of the issues that He, Bessent and Greer will have to work through for Trump and Xi are holdovers from the two leaders' May meeting in Beijing, including an effort on both sides to cut tariffs on non-strategic goods and Chinese pledges to increase purchases of US agricultural goods by $17 billion a year and to purchase more than 200 Boeing aircraft.
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