US Treasury's Bessent to discuss AI, trade, rare earths with China's He, source says

US Treasury Secretary Scott ​Bessent plans to discuss AI, trade, rare earths and economic issues when he ‌meets ​with Chinese Vice Premier He Lifeng in New York City this weekend, according to a source familiar with his plans. The discussions are significant because the US and China are the two major forces driving development of advanced AI tools and the global adoption of the technology. Rare earths play a crucial role in the manufacturing of technology.

Bessent, He and US ‌Trade Representative Jamieson Greer will meet on Sunday in New York, according to a statement released on Friday night by Greer's office. That public statement did not cover topics, but the source who spoke to Reuters earlier said AI, rare earths and economic issues would be discussed. The Associated Press first reported the US plans.

US President Donald Trump and Chinese President Xi Jinping are scheduled for a September 24 summit in Washington. Bessent said in a statement that his meeting with He would include discussions about ‌AI that cover "both open- and closed-weight models." Open-weight models are AI systems with publicly accessible core elements. 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. Chinese AI models have even been used by the US government. Reuters reported on Thursday that a US government website employed an AI model from a Chinese company to allow users to search proposed federal regulations even though the FBI accused the model's developer, Alibaba, of "malicious" copying of Anthropic's technology.

"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 his statement regarding the China talks. Bessent has called for the ⁠US and China ​to agree on AI "guardrails" aimed at keeping powerful models out ⁠of the hands of malign non-state actors.

Questioned on AI safety at a House of Representatives Financial Services Committee hearing on Tuesday, Bessent said it was up to US AI firms to decide whether to slow their development, but argued they should be held liable for what they build and generate ⁠as a safety measure. BROAD RANGE OF DISCUSSIONS

Details about the meetings in New York, which are expected to explore possible areas for Trump and Xi to agree on, have been scant. The source said that the meetings could extend to Monday on a technical or "working" level, and ​that the agenda would stay flexible "to allow for substantive discussion across the range of relevant issues."

Other key topics for Bessent and He to discuss are expected to include potential extension of a tariff truce that expires ⁠on November 10, and improving flows of Chinese-produced rare-earth magnets and critical minerals that China severely curtailed last year. The truce capped tariffs imposed during Trump's second term in office at about 20%. The Supreme Court later struck down Trump's tariffs invoked under a national emergencies law, but his administration has been rebuilding them under ⁠new authorities. ​The US has restored a 12.5% tariff on Chinese goods over forced labor allegations and is finalizing a separate tariff investigation aimed at curbing excess industrial capacity that it says is rampant in China.

At a Trump-Xi meeting in May, China pledged to increase purchases of US agriculture products and at least 200 Boeing aircraft, but details on those transactions have yet to emerge. With only short preparation time, expectations for Bessent and He to arrange major new deals from the Trump-Xi ⁠summit are low, said Wendy Cutler, policy director for the Asia Society in Washington, adding that both sides have an interest in keeping trade tensions from flaring up again.

"If anything, it's an exercise in kind of managing the relationship ⁠and ensuring that the elements in the truce are actually being ⁠lived up to," Cutler said. Also in May, the US and China agreed 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 American companies investing in some industries in China, Reuters reported on Friday that it is ‌working on rules that would likely allow ‌US pharmaceutical firms to invest in promising Chinese drugs and strike licensing deals for them.