Washington/Beijing: The United States and China have agreed to establish a new dialogue mechanism focused on artificial intelligence, adding a technology and national-security channel to the countries’ broader efforts to stabilise relations ahead of a meeting between US President Donald Trump and Chinese President Xi Jinping.
The agreement was reached during talks in New York between US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng, according to the Financial Times. The two sides are expected to meet again in approximately two months as part of the new AI dialogue.
The development comes as Washington and Beijing continue negotiations over trade while competing for technological leadership in artificial intelligence.
AI Becomes a New Area of US-China Engagement
The proposed dialogue is intended to create a direct channel for the two countries to discuss the risks associated with rapidly developing AI systems.
Bessent said the discussions would address issues including uncontrolled AI agents, cyber threats involving AI and risks associated with the potential use of artificial intelligence in areas such as biological and other advanced weapons.
The US has also proposed a notification mechanism for AI-related national-security incidents, which would provide a channel for information-sharing when serious incidents occur.
The initiative reflects a growing recognition in Washington and Beijing that competition in AI is accompanied by risks that can cross national borders.
Trump-Xi Meeting Adds Urgency to Talks
The AI agreement comes just days before a planned meeting between Trump and Xi in Washington.
The two leaders are expected to discuss trade, technology and wider strategic issues when they meet on Thursday.
The AI dialogue gives the countries another mechanism for communication at a time when their relationship remains characterised by competition as well as efforts to avoid a further deterioration in economic ties.
For Washington, AI has become closely connected to national security, economic competitiveness and technological leadership. China, meanwhile, has rapidly expanded its capabilities in artificial intelligence and is seeking a larger role in the global technology sector.
US-China Trade Truce Still Unresolved
While the two sides made progress on AI discussions, they did not reach an agreement on extending their existing one-year trade truce.
The current arrangement is due to expire on November 10, leaving several weeks for Washington and Beijing to negotiate a possible extension.
US officials said disagreements remain over the length of any extension.
Washington has reportedly proposed a six-month extension, while Beijing has sought a longer arrangement extending through the remainder of Trump’s presidency.
The difference illustrates that, despite efforts to stabilise relations, significant disagreements remain between the two economies.
Rare Earths Remain a Major Trade Issue
Rare-earth exports were also discussed during the New York talks.
US officials said they believe China has not fully implemented commitments made under the previous trade arrangement to maintain the flow of rare-earth materials to the United States and its allies.
One US official estimated that China was fulfilling approximately two-thirds of the commitments, while also acknowledging that the reasons for the shortfall remained unclear.
Rare earths are strategically important because they are used in products ranging from electronics and electric vehicles to defence systems and advanced manufacturing.
Any prolonged disruption could therefore affect supply chains well beyond the United States and China.
Washington and Beijing Discuss New Trade Channel
The two countries have also formalised a proposed “board of trade” mechanism.
The initiative is intended to identify non-sensitive products that could potentially be traded under lower tariff rates.
US Trade Representative Jamieson Greer said the mechanism could create additional stability in the relationship by increasing trade in areas considered less strategically sensitive.
The approach represents an attempt to separate areas of economic cooperation from sectors where Washington and Beijing remain locked in strategic competition.
Iran Adds Another Layer to US-China Relations
The discussions also touched on the war involving Iran.
Washington has expressed concerns about China’s economic relationship with Iran, including Chinese purchases of Iranian oil.
US officials have also raised allegations that Chinese entities provided satellite imagery that could be used to target US military bases in the Middle East.
China has denied the allegations involving satellite imagery.
The issue adds another geopolitical dimension to already complicated US-China negotiations.
While Washington and Beijing are attempting to stabilise their economic relationship, their interests increasingly overlap with conflicts and security issues beyond East Asia.
Why the AI Dialogue Matters
The new AI mechanism could become significant because the United States and China are the world’s two leading AI powers.
Both countries are investing heavily in advanced computing, AI models, semiconductor technology and data infrastructure.
At the same time, policymakers are increasingly concerned about the potential misuse of increasingly capable AI systems.
The proposed dialogue could provide a forum for discussing risks before individual incidents develop into larger diplomatic disputes.
It could also help establish basic communication protocols around AI-related national-security events.
Competition and Cooperation Will Continue Side by Side
The latest discussions demonstrate the complicated nature of the US-China relationship.
Washington and Beijing continue to compete over technology, trade and strategic influence, while simultaneously creating channels for cooperation in areas where uncontrolled competition could create additional risks.
The AI dialogue is one example of this approach.
The unresolved trade truce, disagreements over rare earths and concerns surrounding China’s relationship with Iran show that substantial disputes remain.
At the same time, the proposed lower-tariff trade channel and AI discussions indicate that both sides continue to explore ways of maintaining communication.
What Comes Next?
The immediate focus will shift to the Trump-Xi meeting in Washington, where trade, AI, national security and broader bilateral relations are expected to feature prominently.
The new AI dialogue is likely to become a longer-term mechanism rather than a one-time meeting.
The next round of discussions could determine whether Washington and Beijing can establish practical protocols for handling AI-related security incidents.
Meanwhile, the unresolved trade truce will remain another important issue ahead of the November deadline.
For businesses and technology companies, the outcome of the broader US-China negotiations could influence tariffs, semiconductor supply chains, rare-earth availability and access to international markets.
The latest agreement therefore represents both a new avenue for engagement and another indication of how artificial intelligence is becoming increasingly intertwined with global trade and national security.
