PARIS – The Trump administration is “not in a rush” to extend a tariff and critical minerals trade truce with China that ends in November, as there is time to renew it in meetings later in 2026, US Treasury Secretary Scott Bessent said on May 19.
In his first interview since attending last week’s high-stakes summit with Chinese President Xi Jinping in Beijing, Mr Bessent said that he believes China will accept the restoration of prior US tariff rates through new Section 301 duties, as long as they do not go higher.
China in recent months had “gotten a deal” on lower tariffs as a result of the US Supreme Court’s decision striking down President Donald Trump’s global emergency duties, he said on the sidelines of a Group of Seven finance leaders meeting in Paris.
“I think we’re not in a rush to extend it,” Mr Bessent said of the November 2025 tariff truce. “Things are stable.”
He added that China has “been satisfactory, but not excellent in terms of their fulfilment on their side on critical minerals. So we’re seeing them again”.
Mr Xi is expected to travel to Washington to meet with Mr Trump at the White House in September. Prior to that summit, Mr Bessent said that he will meet with his counterpart, Vice-Premier He Lifeng, to work out more details on trade matters.
Mr Trump and Mr Xi also may meet at an Asia-Pacific Economic Cooperation Summit in November in China and a Group of 20 leaders summit in December in Florida.
The US-China truce negotiated over several months in 2025 averted a total collapse of trade between the world’s two largest economies after Mr Trump’s new tariffs on Chinese goods prompted retaliation and escalation that took tariffs to triple digits.
The deal brought down extra tariffs on Chinese goods to about 20 per cent, in addition to about 25 per cent on many Chinese industrial products imposed during Mr Trump’s first term. The extra tariffs are currently at 10 per cent as a result of a temporary tariff that expires in July.
Mr Bessent said that deals for China to order 200 Boeing jetliners and make annual purchases of US$17 billion (S$21.79 billion) in American farm goods resulting from the Trump-Xi summit are considered separate from the November trade truce.
He said that he views the most important achievements as the establishment of bilateral managed trade, investment and artificial intelligence protocols with Beijing, which will be discussed in subsequent negotiations.
In the Board of Trade, the two sides will initially determine about US$30 billion of non-strategic goods on which they can lower or eliminate tariffs.
“We’ll pick a number. My sense is the first number is there’s going to be 30 by 30 (billion dollars), and then both sides will try to fill up the capacity there,” he said, adding that the US agricultural sales will not be included in these totals.
He said that China could reduce tariffs on US energy products, medical equipment and medical devices, while the US would likely cut tariffs on Chinese consumer goods that will not be produced in the US again, such as fireworks or Halloween costumes.
The US maintains tariffs of 7.5 per cent on a raft of Chinese consumer products imposed in 2019 at the height of Mr Trump’s first-term trade war with China, including flat-panel television sets, flash memory devices, smart speakers and bed linens.
The Board of Investment will deal with two-way investment issues, and for inward investment from China, it will focus on identifying deals that would not run afoul of national security and head off investments that the US is not ready to consider.
“I would think this board of investment would either a) keep things from getting to CFIUS, or b) just be like, ‘we’re not really up for that’,” Mr Bessent said.
In the run-up to the Beijing summit, lawmakers, auto and steel groups had urged Mr Trump against opening the door to Chinese investments in US auto plants, for fear that China’s state-supported firms would hollow out a core domestic industry.
The Committee on Foreign Investment in the US, a powerful and opaque committee led by the Treasury Department, polices foreign investment in the US for national security risks. In recent years, it has stepped up bans on Chinese investments in sensitive US tech firms, slowing them to a trickle.
Chinese investment in the US plummeted from US$56.6 billion in 2016 to just US$3.5 billion in 2025, according to Rhodium Group.
Mr Bessent said that investments from Chinese retailers are among those less likely to draw a CFIUS review.
“Luckin Coffee is great, but buying a whole bunch of land next to an Air Force base probably isn’t,” Mr Bessent said, referring to the Chinese coffee chain expanding in the US to challenge Starbucks.
US and Chinese officials will likely start to consult with each other on AI guardrails within the next four to eight weeks, Mr Bessent said.
The effort is aimed at halting proliferation of powerful AI models, such as Anthropic’s Mythos, or tools from China’s DeepSeek to non-state actors, he added.
Concern is growing over the national security risks posed by powerful AI systems, which companies and analysts have warned could supercharge complex cyberattacks by identifying and exploiting previously unknown vulnerabilities faster than companies can repair them. REUTERS
