Bessent and He Lifeng open talks on AI, tariffs and minerals before Trump-Xi

Scott Bessent and He Lifeng sat down at JPMorgan Chase's Manhattan headquarters on Sunday to open the last round of talks before Donald Trump and Xi Jinping meet at the White House later this week. US Trade Representative Jamieson Greer was in the room.

What is on the table

Four items, and each one has a clock on it.

The trade truce expires on 10 November. Under the current arrangement, US tariffs on Chinese goods are capped at about 20 percent. If nothing replaces it, that cap goes.

Critical minerals and rare-earth magnets. A US official said China's performance on restoring mineral flows "has not been up to par". These are the inputs for electric motors, wind turbines, defence electronics and a long list of consumer devices.

Artificial intelligence guardrails. Both sides are trying to agree what limits, if any, apply to each other's frontier systems and the chips that run them.

Iran. The two are discussing coordinating economic pressure on Tehran, which is the same file Pakistan is working from the other end.

Bessent said he looked forward to "focused, fulsome and constructive talks today that will set the stage for our leaders' meeting."

Why a Pakistani reader should bother

Three reasons, in order of how quickly they reach you.

The Iran item is the closest. Iran has just passed three conditions to Washington for reopening the Strait of Hormuz, and Pakistan is one of the channels carrying that traffic, with Interior Minister Mohsin Naqvi due in Tehran. Anything agreed in New York about pressure on Iran changes the arithmetic on a strait that sits directly above Pakistan's fuel import bill. We set out the conditions and the fuel maths in our piece on Hormuz.

The tariff item is slower but larger. Pakistani textile exporters compete with Chinese suppliers in the same American buying offices. A truce that holds keeps Chinese goods at a 20 percent tariff. A truce that lapses raises that, which is good for Pakistani order books in the short run and bad for global demand in the longer one. Neither effect shows up in a single quarter.

The third is the dollar. Any serious breakdown in US-China talks moves the dollar index, and the rupee moves with it whether or not anything has changed in Karachi. Today the interbank rate is Rs 277.2522, flat on Friday. The dollar rate page has the daily series.

What to watch

The summit itself, at the White House later this week, and whether anything is said about 10 November. A leaders' meeting that ends without a date for the truce is the outcome to worry about.