US not in a hurry to extend China trade truce, Bessent says

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 this year, U.S. Treasury Secretary Scott Bessent said on Tuesday.

In his first interview since attending last week’s high-stakes summit between Chinese President Xi Jinping in Beijing, Bessent said that he believes China will accept the restoration of prior U.S. tariff rates through new Section 301 duties, as long as they don’t go higher.

China in recent months had “gotten a deal” on lower tariffs as a result of the U.S. Supreme Court’s decision striking down President Donald Trump’s global emergency duties, he said on the sidelines of a G7 finance leaders meeting in Paris. 

“I think we’re not in a rush to extend it,” 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 fulfillment on their side on critical minerals. So we’re seeing them again.”

Xi is expected to travel to Washington to meet with Trump at the White House in September. Prior to that summit, Bessent said that he will meet with his counterpart, Vice Premier He Lifeng, to work out more details on trade matters.

Trump and 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 U.S.-China truce negotiated over several months last year averted a total collapse of trade between the world’s two largest economies after 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%, in addition to about 25% on many Chinese industrial products imposed during Trump’s first term. The extra tariffs are currently at 10% as a result of a temporary tariff that expires in July.

Bessent said that deals for China to order 200 Boeing jetliners and make annual purchases of $17 billion in American farm goods resulting from the Trump-Xi summit are considered separate from the November trade truce.

Tariff cuts on consumer goods

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 $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 U.S. agricultural sales will not be included in these totals.

He said that China could reduce tariffs on U.S. energy products, medical equipment and medical devices, while the U.S. would likely cut tariffs on Chinese consumer goods that will not be produced in the U.S. again, such as fireworks or Halloween costumes.

The U.S. maintains tariffs of 7.5% on a raft of Chinese consumer products imposed in 2019 at the height of 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 U.S. 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,’” Bessent said.

In the run-up to the Beijing summit, lawmakers, auto and steel groups had urged Trump against opening the door to Chinese investments in U.S. auto plants, for fear that China’s state-supported firms would hollow out a core domestic industry.

The Committee on Foreign Investment in the U.S., a powerful and opaque committee led by the Treasury Department, polices foreign investment in the U.S. for national security risks. In recent years it has stepped up bans on Chinese investments in sensitive U.S. tech firms, slowing them to a trickle.

Chinese investment in the U.S. plummeted from $56.6 billion in 2016 to just $3.5 billion last year, according to Rhodium Group.

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,” Bessent said, referring to the Chinese coffee chain expanding in the U.S. to challenge Starbucks.

U.S. and Chinese officials will likely start to consult with each other on AI guardrails within the next four to eight weeks, 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.

G7 finance ministers agree need for action on economic imbalances

G7 finance ministers agreed on Tuesday on the need for action to tackle trade imbalances in a fragmented global economy, saying the current situation was unsustainable with Bessent arguing for more protections against a flood of cheap Chinese imports. 

The finance ministers and G7 central bank governors met in Paris for a second day to discuss the economic fallout from the Iran war and volatility on global bond markets but were light on concrete measures.

They agreed on the need to re-open the Strait of Hormuz and support Ukraine, but some splits between the United States and the others on key issues to do with Iran and Russia persisted.

Bessent told Reuters in an interview that he had warned European counterparts that they needed trade protections against a flood of Chinese exports that would damage their economies as China continues to build excess industrial capacity in the face of chronically weak domestic demand. 

“Unfortunately, I was right,” he told Reuters in an interview after the meeting. “And the Chinese have hit the accelerator, so they’re manufacturing more.”

With poor domestic consumption sapping growth in China, “now more gets exported,” he added. 

French Finance Minister Roland Lescure said the finance chiefs also discussed diversifying the supply of rare earths and critical minerals and addressing global economic imbalances - a major theme of France’s G7 presidency.

He said such imbalances were fueling trade friction and risked a turbulent unwinding in financial markets, highlighting a pattern whereby China under-consumes, the United States over-consumes and Europe under-invests. 

“We all share a common view. Those imbalances are not sustainable,” Lescure told reporters after the meeting. He called for the International Monetary Fund to improve its monitoring and analysis, and pledged to continue discussions.

The G7 ministers agreed that their domestic agendas needed to include plans to increase investments, improve productivity and curb policies that distort markets, Lescure said.

He cited large Chinese export surpluses as part of the issue, but discussions so far in the broader G20, of which China is a member, haven’t yielded much progress.

G7 ministers said in a statement it was “imperative” to ensure a return to free and safe transit through the Strait of Hormuz and ease strains on energy, food and fertilizer supply.

Other G7 countries have expressed frustration that Washington and Israel launched strikes against Iran without considering the economic impact of the foreseeable closure of the strait, a vital waterway for energy markets, while Trump has castigated some allies like Britain and Germany for not fully supporting the operation. 

Bessent said European allies needed to better enforce financial sanctions on Iran, while Asian allies should tackle Iran’s shadow fleet to prevent transfer of oil to non-sanctioned tankers.

The joint statement said the G7 countries were united in their condemnation of Russia and their unwavering support for Ukraine. However, a U.S. decision to again extend a sanctions waiver to allow purchases of Russian seaborne oil to aid “energy-vulnerable” countries for 30 more days was a source of tension in the group.

Lescure said it was for Bessent to justify the waiver extension, while European Economic Commissioner Valdis Dombrovskis said that G7 countries “are not always 100% aligned on everything, and this is unfortunately one of those topics.”

On critical minerals and rare earths, G7 governments are trying to coordinate efforts to reduce reliance on China, which dominates supply chains vital for technologies such as electric vehicles, renewable energy and defense systems.

The ministers pledged to “deepen and expand our cooperation among G7 members and with like-minded partners” on critical minerals, while Bessent said the G7 was working on critical minerals inventory reserves, pricing and price-floor mechanisms to keep China from undercutting alternative supply efforts.

Additional reporting by Alistair Smout, Leigh Thomas, and Makiko Yamazaki, Dominique Vidalon and Sudip Kar-Gupta.

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 19, 2026 at 1:59 PM.