Bessent sets stage for Xi visit in high-level China talk

Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer held a high-level video call with China's vice premier to prepare for the September visit of its president, Xi Jinping, Axios has learned.

Why it matters: The call sets the stage for President Trump and Xi to sign future trade deals between the U.S. and China. But there are tensions.

Zoom in: The cordial video conference call between Bessent, Grier and Chinese Vice Premier He Lifeng lasted more than an hour.

"I emphasized that we expect Beijing to fully meet its commitments on rare earths and U.S. agricultural products," Bessent told Axios in a written statement.

"We also discussed implementation of the Trade and Investment Boards as a mechanism to secure concrete progress toward a more balanced, fair, and constructive U.S.-China economic relationship."

Between the lines: One source familiar with the talks said that "over the past several months, China adopted or relied upon measures that create new risks for U.S. firms, restrict lawful commercial activity, and seek to deter lawful U.S. national security actions."

"This is problematic," the source said. "The U.S. has raised these concerns repeatedly within their trade and economic channel and provided China time to reverse course, but China has continued to escalate and cause chaos.

"China's continued escalations will have consequences."

Zoom out: Relations between the two countries have been tense amid the battle for AI supremacy.

Trump has sought to limit China from obtaining advanced computer microchips, and Xi threatened to withhold critical minerals needed for advanced computer and weapons technology.

At a meeting in Beijing, Trump and Xi appeared to put differences behind them but signed no new deals.

But this week, the Trump administration announced plans to ban Chinese robots and power inverters as national security threats.

Adding a new layer of complexity is the Iran war.

China is an Iranian ally and, according to Reuters, plans to sell shoulder-fired missiles to Iran. Trump said he would be "disappointed" if the sale went through.

Earlier this month, Trump released once-classified documents indicating China meddled in the 2020 election. He then expressed hesitation about pushing the issue with Xi.

"They do things and we do things to them. I'll be honest. We do things to them too," Trump told reporters last week. "It's not a one-way street. But we'll be talking to them, yes." ...