US, China economic chiefs meet to clear path to Trump-Xi summit

Top US and Chinese economic officials launched a new round of talks in Paris on Sunday to iron out kinks in their trade truce and clear a smooth path for US President Donald Trump's trip to Beijing to ‌meet with Chinese President Xi Jinping at the end of March.

The discussions, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, are expected to focus on shifting US tariffs, the ​flow of Chinese-produced rare earth minerals and ⁠magnets to US buyers, American high-tech export controls and Chinese purchases of US agricultural products.

The two sides began talks on Sunday morning at the Paris headquarters of the ‌Organisation for Economic Co-operation and Development, and were expected to continue ‌on Monday, a Treasury official said. China is not a member of the club of 38 mostly wealthy democracies and considers itself a developing country.

US Trade Representative Jamieson Greer, who is participating in the talks, said before departing for Paris that US officials want to ensure stability in the US-China relationship.

"We want to make sure that we continue to get the rare earths we need for our manufacturing base, that they keep buying the kinds of things they should be buying ‌from us, and that the leaders have a chance to get together and make sure that the relationship is going the way we want it to go," Greer said on Friday on CNBC.

The talks between Bessent, He, Greer ⁠and China trade negotiator Li Chenggang follow a string of their meetings in European cities last year to ease trade tensions that threatened a near collapse of trade between the world's two largest economies.

US-China trade analysts said that with little time to prepare and Washington's attention focused on the US-Israeli war on Iran, prospects for a major trade breakthrough are limited, in Paris or at the Beijing summit.

"Both sides, I think have a minimum goal of having a meeting, which sort of keeps things together and avoids a rupture and re-escalation of tensions," said Scott Kennedy, a China economics expert at the centre for Strategic and International Studies in Washington.

Trump may want to come away from Beijing with major Chinese commitments to order new Boeing aircraft and buy more US liquefied natural gas and soybeans, but to get that he may need to offer some concession on US export controls, Kennedy added.

Trump and ​Xi could potentially meet three other times this year, including at a China-hosted APEC summit in November and a U.S.-hosted G20 summit in December that could yield more tangible progress.

The Iran war will likely come up at the Paris talks, especially in reference to the spike in oil prices and the closure of the Strait of Hormuz, through which China gets 45% of its oil. Bessent on Thursday announced a 30-day waiver of sanctions to allow the sale of Russian oil stranded at sea in tankers, a move to raise supplies.

On Saturday, Trump urged other nations to help protect shipping in the Strait of Hormuz, after Washington bombed military ⁠targets on Iran's Kharg Island oil loading hub and Iran threatened to retaliate.

"Meaningful" progress in Sino-US economic cooperation could restore confidence to an increasingly fragile global economy, China's state-run Xinhua news agency said in a commentary on Sunday.

The two sides are expected to review their progress in meeting commitments under the October 2025 trade truce declared by Trump and Xi in Busan, South Korea. The deal forestalled a major flare-up in tensions, trimmed US tariffs on Chinese imports, and paused for a ​year China's draconian export controls on ‌rare earths. It also paused the expansion of a US blacklist of Chinese companies banned from buying high-technology US goods such as semiconductor manufacturing equipment.

China also agreed to buy 12 million metric tonnes of US soybeans ‌during the 2025 marketing year and 25 million tonnes in the 2026 season, which will start with the autumn harvest.

US officials, including Bessent, have said China has so far met its commitments under the Busan deal, citing soybean purchases that met initial goals.

But while some industries are receiving rare earth exports from China, which dominates global production, US aerospace and semiconductor companies are not and are facing worsening shortages of key materials, including yttrium, used in heat-resistant coatings for jet engines.

"US priorities will ‌likely be about agricultural purchases by ‌China and greater access to Chinese rare earths in the short term" at the Paris talks, said William Chou, ⁠a senior fellow at the Hudson Institute, a Washington think tank.

Greer and Bessent also bring a new irritant to the Paris talks, a "Section 301" investigation into unfair trade ‌practices targeting China and 15 other major trading partners over alleged excess industrial capacity that could lead to a new round of tariffs within months. Greer also launched a similar probe into alleged forced labour practices in 60 countries, including China, that could ban certain imports into the US

The probes aim to rebuild tariff pressure on trading partners after the US Supreme Court ⁠struck down Trump's global tariffs under an emergency law as illegal. The ruling effectively reduced Trump's tariffs on Chinese goods by 20 percentage points, but he immediately imposed a 10% global tariff under another trade law.

China on ​Friday denounced the probes and said it reserved the right to take countermeasures. An editorial by state-run China Daily added that the probes were representative of unilateral actions that complicate negotiations.

"The new round of talks is both an opportunity and a test," Xinhua said.

"Whether the upcoming talks can achieve progress will largely depend on the US side. Washington needs to approach the negotiations with a rational and ⁠pragmatic mindset and act in line with the principles that underpin stable China-U.S. economic relations."

Reuters