Beyond Tariffs: Trump-Xi Summit Puts Rare Earths, AI Guardrails, and Energy Flows to Test

Ahead of a high-stakes Washington summit between President Donald Trump and Chinese President Xi Jinping on September 24, senior US and Chinese officials met in New York over the weekend to work through three issues increasingly seen as more consequential than tariffs alone: rare-earth mineral flows, AI safety guardrails, and the fate of an expiring trade truce.

Who Met and Where

US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng opened talks Saturday, September 20, at JP Morgan Chase's Manhattan headquarters, joined by US Trade Representative Jamieson Greer. The meetings began around 10:30 a.m. and were expected to run through the day, with the possibility of extending into Monday at a "working" level, according to a source familiar with the plans. Details of the specific agenda remained scant, with both sides keeping the discussion flexible enough to allow for broad-ranging talks.

Issue One: Rare Earths and Critical Minerals

The most immediate friction point involves Chinese rare-earth magnets and critical minerals, which China severely curtailed last year amid escalating tariffs on both sides. Under an earlier truce, China promised to restore the flow of these materials to US and global users, but a senior US official told reporters Friday that China's performance on that commitment "has not been up to par." American manufacturers and chip companies say the minerals have been arriving too slowly and in insufficient quantities. Notably, US officials have said they will not exchange American export controls for mineral flows Washington believes Beijing has already committed to provide — a firm negotiating line ahead of the summit.

Issue Two: AI Safety Guardrails

The second major topic reflects a striking new front in US-China relations: both countries, as the two dominant global forces in advanced AI development, are exploring shared "guardrails" for artificial intelligence. Bessent has publicly framed this not as a formal treaty, but as "a framework for keeping both sides informed" about model capabilities and shared risks. Discussions reportedly focus on establishing safety guardrails, preventing system bifurcation between separate AI ecosystems, and managing shared risks across both open-weight and closed-weight AI models. Questioned on AI safety at a House Financial Services Committee hearing, Bessent said it was ultimately up to US AI firms to decide whether to slow their own development, but argued they should be held liable for what their models build and generate as a safety measure. This guardrails discussion comes amid reported concerns over "key security breaches involving AI models" — a backdrop that adds urgency to the talks beyond pure commercial competition.

Issue Three: The Expiring Trade Truce

The existing US-China tariff truce is set to expire on November 10, and its potential extension is a central agenda item. The truce capped tariffs imposed during Trump's second term at roughly 20%, though the US Supreme Court later struck down Trump's tariffs invoked under a national emergencies law — including duties tied to fentanyl trafficking — forcing the administration to rebuild its tariff structure under new legal authority. Reports indicate the US may be preparing to suspend many remaining China tariffs, leaving only a modest 7.5% duty, and that a long-delayed report on Chinese excess manufacturing capacity is being deliberately pushed back until after the summit to avoid disrupting the diplomatic tone ahead of the leaders' meeting.

A Notably Warmer Tone Than Past Meetings

Analysts have noted that trade tensions between the US and China — historically a central and often combative theme of previous Trump-Xi meetings — have "eased sharply" since the two leaders last met. Trump himself struck an unusually upbeat note in the Oval Office ahead of the summit: "We're doing very well with China... President Xi and I have a good relationship. We're going to have a lot of different deals." He has also notably downplayed separate reporting alleging China provided Iran with targeting data used against US service members in the Middle East — a sign of how much the administration appears to be prioritizing a constructive summit tone over other points of friction.

Additional Items on the Table

Beyond the three headline issues, the pre-summit discussions are also expected to touch on US agricultural purchases (monitoring past Chinese commitments), port fees on shipping vessels, and the long-unresolved status of TikTok's US operations, which the Trump administration has signaled it may finally be close to resolving with Beijing.

What Analysts Expect

Most analysts don't anticipate sweeping breakthroughs from this round of talks. The most likely outcome, according to trade analysts cited by Reuters, would be for Washington and Beijing to agree on modest, incremental steps demonstrating continued avoidance of escalation, rather than resolving the underlying disputes over minerals, AI, and trade in one sitting. As one report put it, "the truce has held but the underlying disputes have not moved" in the nearly year since both sides agreed to freeze tariffs at current levels.

Why Europe Is Watching Closely

The summit's outcome carries implications beyond the US and China directly. The European Union is preparing for its own talks with Beijing in early October, and EU Trade Commissioner Maros Sefcovic has said that meeting will need to show "concrete results" from China to avert the bloc deploying its own countermeasures — meaning whatever framework emerges from Washington's talks with Beijing this week could shape the tone and leverage available in Europe's parallel negotiations weeks later.

What's Next

With the formal Trump-Xi summit scheduled for September 24 in Washington, this weekend's Bessent-He Lifeng talks are widely seen as the groundwork-laying session meant to identify areas of possible agreement before the two leaders meet directly. Whether the summit produces written commitments on rare earths, AI guardrails, or the tariff truce extension — or simply reaffirms a general spirit of cooperation — remains an open question neither government was willing to answer ahead of time. For continuing coverage, see the full CNBC/Reuters report.