US, China discuss trade, rare earths in call ahead of Xi visit

US Treasury Secretary Scott Bessent said he held a call July 30 with Chinese Vice-Premier He Lifeng to lay the groundwork for Xi Jinping’s US visit, a discussion that also touched on numerous flashpoints between the two countries.“I emphasised that we expect Beijing to fully meet its commitments on rare earths and US agricultural products,” Bessent said in a post on X.“We also discussed implementation of the Trade and Investment Boards as a mechanism to secure concrete progress toward a more balanced, fair, and constructive US-China economic relationship.”Bessent was also joined by US Trade Representative Jamieson Greer on the call.He for his part expressed “serious concern” over recent US measures taken against Beijing during the discussion, according to a readout from China’s official Xinhua News Agency.The two sides agreed to “enhance communication, build mutual trust and dispel doubt”, the release said.Bessent and He have met regularly over the past year and a half to discuss sensitive elements of US-China relations, including tariffs, rare earths and the social media app TikTok.That process produced a fragile detente that allowed for US President Donald Trump’s state visit to Beijing in May. Xi is due to visit the US in September.The world’s two largest economies are currently in the midst of a trade truce that led to the suspension of some tariffs and other export curbs.More recently, however, some cracks have appeared in the relationship, including over fresh import duties as Trump moves to rebuild his tariff wall, access to rare earth minerals, potential shipments of Chinese weaponry to Tehran amid the US-Iran war and the roll-out of Chinese artificial intelligence models.Those new open-weight AI models can compete with some of the most advanced models developed by US firms and have spurred worries in Washington.Bessent recently suggested US sanctions could be used to crack down on what he described as potential intellectual property theft on the part of Chinese AI firms.The US has also issued restrictions on foreign-made robots and inverters, citing “supply chain vulnerabilities”.The curbs issued by the Federal Communications Commission did not mention Beijing directly but given the fact that most of these items are produced in China, it amounted to a ban on products from the nation. BLOOMBERG