U.S. Treasury Secretary Bessent: Sino-U.S. Trade Tensions Stabilize; Bilateral "Managed Trade Mechanism" to Be Established

U.S. Treasury Secretary Bessent said on Tuesday, May 19, in Paris that the Trump administration is "not in a rush" to extend the U.S.-China trade truce agreement on tariffs and critical minerals trade, which is set to expire in November, noting that both sides still have time to continue consultations later this year.

This marks Bessent's first media interview since his visit to Beijing last week for the U.S.-China leaders' summit.

Speaking during the G7 Finance Ministers' Meeting in Paris, Bessent told Reuters that the current situation is "stable," so there is no urgency to extend the trade truce agreement expiring in November. He noted that China has generally performed well in its commitments regarding exports of critical minerals but still has room for improvement, thus requiring continued dialogue between the two sides.

U.S. Plans to Reimpose Some Tariffs on China

Bessent stated he believes Beijing will accept the U.S. reinstating some previously imposed tariffs on Chinese goods under Section 301, as long as the tariff rates are not further increased. He added that China has actually benefited from lower tariff treatment recently due to the U.S. Supreme Court overturning the Trump administration’s “global emergency status” tariff measures.

Under the agreement reached after months of negotiations last year, the U.S. and China avoided a full-scale trade war between the world’s two largest economies. At the time, the Trump administration imposed new tariffs on Chinese goods, prompting Beijing’s retaliation, with tariffs escalating to "triple-digit" levels. Currently, additional U.S. tariffs on Chinese goods have been reduced to around 20%, plus approximately 25% industrial tariffs retained from Trump’s first term. The temporary additional 10% tariffs currently in effect are set to expire in July.

U.S. and China Plan to Establish a "Managed Trade Mechanism"

Bessent revealed that the most significant achievement so far between the two sides is the establishment of a new bilateral framework for "managed trade, investment, and artificial intelligence." This mechanism will be further detailed in upcoming negotiations. He said both sides plan to initially select about $30 billion worth of "non-strategic commodities" under a proposed "Board of Trade" mechanism, gradually reducing or eliminating tariffs on these items.

Under the U.S. proposal, China may reduce tariffs on American energy products, while the U.S. could lower tariffs on certain Chinese consumer goods—such as fireworks and Halloween costumes—that are "unlikely to be re-produced domestically in the U.S."

Currently, the U.S. maintains a 7.5% tariff on Chinese consumer goods including televisions, flash memory devices, smart speakers, and bedding—measures originally introduced during the peak of the 2019 U.S.-China trade war.

U.S. Strengthens Review of Chinese Investments

Bessent also mentioned that the U.S. and China plan to establish an "Investment Board" specifically to address mutual investment issues. For Chinese investments in the U.S., the U.S. will focus on screening projects that do not involve national security risks. He explained that one purpose of this mechanism is to avoid sensitive investments entering the formal review process at the Committee on Foreign Investment in the United States (CFIUS).

In recent years, the U.S. has significantly tightened restrictions on Chinese investments, particularly in sensitive technology sectors. According to Rhodium Group data, Chinese investment in the U.S. has dropped sharply from $56.6 billion in 2016 to just $3.5 billion last year.

AI Safety Talks to Begin Soon

Bessent also disclosed that artificial intelligence (AI) safety talks are expected to launch within the next four to eight weeks. He emphasized that one goal is to prevent advanced AI models and tools from spreading into the hands of non-state actors.

As AI technology rapidly advances, concerns over national security risks are intensifying worldwide. Analysts warn that advanced AI systems could accelerate complex cyberattacks and identify system vulnerabilities faster than companies can patch them.

Source: rfi

Original article: toutiao.com/article/1865680286138435/

Disclaimer: The views expressed in this article are those of the author alone.