US, China economic chiefs meet in Paris to clear path to Trump-Xi summit

PARIS - Top US and Chinese economic officials launched a new round of talks in Paris on March 15 to iron out kinks in their trade truce and clear a smooth path for US President Donald Trump’s trip to Beijing to meet Chinese leader Xi Jinping at the end of March.

The discussions, led by US Treasury Secretary Scott Bessent and Chinese Vice-Premier He Lifeng, are expected to focus on shifting US tariffs, the flow of Chinese-produced rare earth minerals and magnets to US buyers, American high-tech export controls and Chinese purchases of US agricultural products.

The two sides began talks on March 15 at the Paris headquarters of the Organization for Economic Cooperation and Development, a US Treasury official said. China is not a member of the club of 38 mostly wealthy democracies and considers itself a developing country.

US Trade Representative Jamieson Greer will also join the talks, which continue from a string of meetings in European cities in 2025 aimed at easing tensions that threatened a near collapse of trade between the world's two largest economies.

US-China trade analysts said that with little time to prepare and Washington’s attention focused on the US-Israeli war on Iran, prospects for a major trade breakthrough are limited, in Paris or at the Beijing summit.

“Both sides, I think, have a minimum goal of having a meeting, which sort of keeps things together and avoids a rupture and re-escalation of tensions,” said Mr Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington.

Mr Trump may want to come away from Beijing with major Chinese commitments to order new Boeing aircraft and buy more US liquefied natural gas and soya beans, but to get that, he may need to offer some concession on US export controls, Mr Kennedy added.

Instead, Mr Kennedy said chances were high for a summit that “superficially suggests progress but that really just leaves things about where they've been for the last four months”.

Mr Trump and Mr Xi could potentially meet three other times in 2026, including at a China-hosted Asia-Pacific Economic Cooperation summit in November and a US-hosted Group of 20 summit in December that could yield more tangible progress.

Oil concerns

The US-Israeli war on Iran will likely come up at the Paris talks, especially in reference to the spike in oil prices and the closure of the Strait of Hormuz, through which China gets 45 per cent of its oil. Mr Bessent on March 12 announced a 30-day waiver of sanctions to allow the sale of Russian oil stranded at sea in tankers, a move to raise supplies.

On March 14, Mr Trump urged other nations to help protect shipping in the Strait of Hormuz, after Washington bombed military targets on Iran’s Kharg Island oil loading hub and Iran threatened to retaliate.

“Meaningful” progress in Sino-US economic cooperation could restore confidence in an increasingly fragile global economy, China’s state-run Xinhua news agency said in a commentary on March 15.

Trade truce review

The two sides are expected to review their progress in meeting commitments under the October 2025 trade truce declared by Mr Trump and Mr Xi in Busan, South Korea.

The deal forestalled a major flare-up in tensions, trimmed US tariffs on Chinese imports, and paused for a year China’s draconian export controls on rare earths. It also paused the expansion of a US blacklist of Chinese companies banned from buying high-technology US goods such as semiconductor manufacturing equipment.

China also agreed to buy 12 million tonnes of US soya beans during the 2025 marketing year and 25 million tonnes in the 2026 season, which will start with the autumn harvest. US officials, including Mr Bessent, have said that China has so far met its commitments under the Busan deal, citing soya bean purchases that met initial goals.

But while some industries are receiving rare earth exports from China, which dominates global production, US aerospace and semiconductor firms are not and are facing worsening shortages of key materials, including yttrium, used in heat-resistant coatings for jet engines.

“US priorities will likely be about agricultural purchases by China and greater access to Chinese rare earths in the short term” at the Paris talks, said Mr William Chou, a senior fellow at the Hudson Institute, a Washington think-tank.

New trade probes

Mr Greer and Mr Bessent bring a new irritant to the Paris talks: a new “Section 301” investigation into unfair trade practices targeting China and 15 other major trading partners over alleged excess industrial capacity that could lead to a new round of tariffs within months. Mr Greer also launched a similar probe into alleged forced labour practices in 60 countries, including China, that could ban certain imports into the US.

The probes aim to rebuild Mr Trump’s tariff pressure on trading partners after the US Supreme Court struck down his global tariffs under an emergency law as illegal. The ruling effectively reduced Mr Trump’s tariffs on Chinese goods by 20 percentage points, but he immediately imposed a 10 per cent global tariff under another trade law.

China on March 13 denounced the probes and said it reserved the right to take countermeasures. An editorial by state-run China Daily added that the probes were representative of unilateral actions that complicate negotiations.

“The new round of talks is both an opportunity and a test,” Xinhua said. “Whether the upcoming talks can achieve progress will largely depend on the US side. Washington needs to approach the negotiations with a rational and pragmatic mindset and act in line with the principles that underpin stable China-US economic relations.” REUTERS