Trump-Xi dialogue on trade and AI chip export controls shows limited progress on rare earth supply restrictions, ahead of broader negotiations.
American and Chinese negotiators spent eight hours Sunday in a conference room at JPMorgan Chase's Manhattan headquarters in what Treasury Secretary Scott Bessent described as "very successful." The session served as the final prep meeting before President Donald Trump hosts his Chinese counterpart, Xi Jinping, at the White House this week.
Bessent and U.S. Trade Representative Jamieson Greer sat across the table from Chinese Vice Premier He Lifeng and chief negotiator Li Chenggang. This quartet has spent roughly 16 months rotating through cities in Europe and Asia since their first round in Geneva in May 2025, laying groundwork that Trump and Xi later formalize at the summit level.
The headline development was a formal channel for the two AI superpowers to discuss risk, structured as a notification system for incidents serious enough to raise national-security concerns on either side. Greer was explicit about boundaries: controls on exporting advanced AI chips and semiconductor manufacturing equipment were not part of this conversation, keeping one of the more sensitive fronts of the relationship off this round's agenda.
On trade, outcomes were mixed. Greer confirmed that the Board of Trade—created at May's Beijing summit—is now formally operating to identify non-strategic goods eligible for tariff cuts, with China likely offering consumer goods and low-tech items while Washington puts forward energy, agricultural products and possibly medical equipment. Rare earths, however, remain stalled. Neither official reported progress on critical minerals, a grievance Washington has pressed for months with little result.
Sunday's session built on loose threads from Trump's May visit to Beijing, when the White House announced China had committed to purchasing at least $17 billion annually in American farm goods through 2028. Beijing also approved an initial order of 200 Boeing jets—its first commercial aircraft purchase from a Chinese airline in nearly a decade—though Trump had mentioned a figure as high as 750 planes, a number neither Boeing nor Beijing has confirmed.
Xi arrives Thursday in Washington for what China's foreign ministry confirmed will be his first state visit since Trump's second term began. Markets reflected an optimistic tone: U.S. stock futures climbed, and by Monday morning in Asia, South Korea's Kospi index gained nearly 1.8%, with Samsung Electronics jumping 5%, while Hong Kong's Hang Seng and Shanghai's benchmark both extended gains.
The Busan tariff truce, expiring November 10, saw no forward movement. Without final numbers on tariffs or purchase volumes from Sunday's meeting, markets are treating the outcome as a goodwill gesture rather than a sealed agreement. The real test lands Thursday, when Trump and Xi determine whether eight hours of Manhattan boardroom negotiating translates into actual policy.