US Treasury Secretary Announces Agreement to Extend US-China Trade Truce by Two Months; China Mentions First AI Discussions

US Treasury Secretary Scott Bessent stated on September 23 (local time) that the United States and China have agreed to extend their "trade truce," which was set to expire in November, by two months.

In an interview with Fox News that day, regarding the outcome of his talks with Chinese Vice Premier He Lifeng, Secretary Bessent said, "We have agreed to extend the so-called 'Busan Agreement,' the duration of the economic agreement between the US and China that was scheduled to end on November 10."

The "Busan Agreement" refers to the understandings reached during a summit between US President Donald Trump and Chinese President Xi Jinping held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) meeting in Busan in October of last year.

At that time, the two leaders agreed to refrain from escalating the "trade war," in which they had been exchanging tariffs exceeding 100% against each other, and to suspend additional tariffs and some trade retaliation measures for one year.

Ahead of the summit between President Trump and President Xi at the White House on September 24, expectations had been raised that the two countries would lean toward extending the trade truce under the previous agreement for a full year.

However, meeting at the World Bank (WB) headquarters in Washington on September 23, just a day before the summit, Secretary Bessent and Vice Premier He narrowed down the extension of the trade war truce to two months instead of one year during their last-minute discussions to coordinate agendas.

Regarding their first talks held in New York on September 20, Secretary Bessent described, "We met for about 12 hours, but there were still agenda items that hadn't been finalized. So, today we met again to discuss whether we could reach a larger-scale agreement rather than a series of smaller issues."

Explaining the decision to agree only to a two-month extension, he said, "To buy more time to see what we can do in the economic sphere."

As for the possibility of achieving a "larger-scale agreement" during the extended period, he remarked, "I don't know. It's not even certain whether we will simply extend the current agreement as is. There are a few things the Chinese side has not fully implemented. We have communicated our expectations to see if they will fulfill the agreement more comprehensively."

Regarding what unfulfilled issues remain on China's part, he explained, "There are about 17 billion dollars worth of soybean purchase commitments and other agricultural product purchase commitments that, in our judgment, are running a bit behind schedule, and we are encouraging China to fulfill them."

When asked about tangible outcomes from the upcoming summit, Secretary Bessent mentioned the activation of a bilateral trade committee discussing the lifting of tariffs on non-sensitive items worth 30 billion dollars each, financial services, and China's purchase of US agricultural products, adding, "Quite a lot of work is currently underway."

In particular, when asked whether a proposal to establish a "hotline" to notify each other in the event of artificial intelligence (AI)-related incidents would be accepted, Secretary Bessent stated, "I believe they [China] will agree."

He continued, "Whether it's out-of-control AI agents, or non-state actors using AI for cyber operations or biological weapons, we are working with China to define what the most important or most dangerous elements are. While nothing has been decided yet, we hope to be able to discuss any incidents that occur [with China], especially cross-border ones."

Regarding the point that there are still no sanctions against China's major banks in connection with the US tightening its isolation of Iran through an "economic pariah strategy," Secretary Bessent noted, "For some countries, it is better to have private discussions than to make a public spectacle," hinting that the relationship between Iran and China would be discussed at this summit.

While the Chinese government announced that it reached several points of consensus in this trade negotiation, it remained tight-lipped about specific agreement details.

During a press conference on September 24, Chinese Foreign Ministry Spokesperson Guo Jiakun sidestepped direct questions regarding the two-month extension of the trade truce and AI dialogue, advising reporters to "consult the competent authorities."

He Yadong, spokesperson for the Ministry of Commerce—the competent authority—explained during a press briefing that they discussed common interests, including the implementation of existing negotiation consensus, measures to reduce mutual tariffs, the establishment of trade and investment committees, and the extension of agreement items from negotiations held in Malaysia prior to last year's Busan summit.

He evaluated that they "had a candid, in-depth, and very constructive exchange of views" and "reached a consensus on multiple items."

Spokesperson He also stated, "(The two sides) held their first talks on AI under the framework of the US-China economic and trade negotiations," adding, "Moving forward, China will maintain close communication with the US regarding follow-up work under the US-China economic and trade negotiation mechanism."

(Photo: Capture from Secretary Bessent's X, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.