Treasury Secretary Scott Bessent on November 10 outlined a dual approach to U.S.-China relations, emphasizing balanced trade and shared AI governance ahead of next week’s Shenzhen summit between U.S. President Donald Trump and Chinese leader Xi Jinping.
Two key developments emerged from the remarks: First, Bessent reaffirmed the administration’s stance of ‘de-risking, not decoupling’ in economic ties, while calling for reciprocal trade policies to reduce mutual dependence. Second, he announced the creation of a new bilateral dialogue mechanism focused on super intelligence (AI) governance, aimed at managing risks while allowing competition.
Part 1: Immediate Actions & Core Facts
Balanced Trade Framework Announced
Bessent, speaking at a New York gala hosted by the National Committee on U.S.–China Relations, stated that the U.S. must increase domestic production of goods it consumes, while China should boost its consumption of goods it produces. He framed the relationship as ‘one of this century’s most consequential’, noting that Trump and Xi’s frequent engagements this year have fostered direct dialogue.
The Treasury secretary also highlighted a new trade agreement under the Board of Trade, a bilateral forum established to address tariffs and agricultural barriers. The deal includes easing tariffs on $30 billion worth of nonsensitive goods in both directions and establishes a working group to resolve agricultural trade disputes. China has committed to purchasing at least 25 million metric tons of U.S. soybeans and 10 million metric tons of coal over the next two years.
AI Governance Dialogue Mechanism Established
Bessent introduced a new U.S.-China dialogue mechanism focused on super intelligence (AI), designed to contain shared risks while acknowledging systemic competition. The mechanism will facilitate exchange of best practices for testing advanced AI models before deployment, with both sides agreeing to alert each other to serious incidents involving AI systems. The framework emphasizes keeping human judgment in command of AI technologies.
Part 2: Deeper Dive & Context
Trade Reciprocity: Rhetoric vs. Reality
Bessent’s call for reciprocity reflects a broader administration policy aimed at reducing trade imbalances without severing economic ties. He explicitly stated that the approach ‘does not reflect hostility’ and seeks to restore ‘a spirit of reciprocity’ in bilateral trade. Chinese Ambassador Xie Feng echoed this sentiment, asserting that ‘China and the United States stand to gain from cooperation and lose from confrontation.’
However, the Board of Trade’s $30 billion tariff easing agreement applies only to nonsensitive goods, leaving high-tariff sectors (e.g., steel, electronics) unresolved. Critics argue that such measures may not address structural imbalances in trade flows, particularly in manufactured goods and technology.
AI Governance: Cooperation with Competition
The new AI dialogue mechanism represents a rare area of cooperation amid broader technological rivalry. Bessent clarified that the U.S. will not limit AI advancement to maintain a competitive edge, though he acknowledged the need for regulatory guardrails. In a CBS interview released days prior, Trump stated he ‘doesn’t mind guardrails’ but warned against regulations that could ‘put the U.S. in a deep second position’ behind China.
China’s foreign ministry has rejected calls to slow AI development, arguing that such restrictions would disrupt global governance. Huiyao Wang, founder of the Center for China and Globalization, a Beijing-aligned think tank, emphasized that U.S.-China talks should ‘confront AI risks’ while avoiding ‘confrontation.’
Leadership Dynamics & Upcoming Summit
Bessent underscored the personal relationship between Trump and Xi as a catalyst for engagement, noting that their unusual frequency of meetings this year has enabled direct communication at the working level. The Shenzhen summit, scheduled for next week, is expected to further solidify these dialogue mechanisms, though ‘red lines’—such as technology transfer restrictions and national security concerns—remain unaddressed.
Long-Term Implications
The administration’s dual approach—economic de-risking with AI cooperation—signals a nuanced strategy that avoids full decoupling while managing competition. However, the limited scope of the tariff deal and the absence of binding AI restrictions suggest that structural tensions persist. The success of these initiatives may hinge on the outcome of the Trump-Xi meeting, which could either de-escalate tensions or entrench existing divides.