By David Lawder and Antoni Slodkowski
NEW YORK, Sept 20 (Reuters) - US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng concluded talks in New York on Sunday with the US side proposing a new AI safety notification mechanism for US President Donald Trump and Chinese President Xi Jinping to consider at their summit this week.
Bessent told reporters that the two sides discussed setting up a new US-China AI dialogue, with a particular emphasis on national security concerns with a notification
system for common goals and common threats that would cover AI-related incidents that rise to a national security level.
"We think that, just like with any cross-border activity, that moving from opaque to more transparency between the number one and the number two AI powers in the world is very important," Bessent said at the conclusion of the talks.
Trump and Xi first discussed potential consultations on AI development in May in Beijing, but that forum was never formalized.
The Chinese response to the US proposal was unclear. Vice Premier He and China's chief trade negotiator Li Chenggang left the talks at JPMorgan Chase headquarters in New York without speaking to media.
US Trade Representative Jamieson Greer said US export controls on sophisticated AI chips and semiconductor manufacturing equipment were not on the agenda for the AI mechanism talks.
Greer added that Sunday's discussions would prepare the groundwork for a "successful summit" between Trump and Xi next Thursday and Friday in Washington.
"These are the two most powerful countries on earth, whether it's in trade or AI, and it's imperative that they're able to work together. It doesn't mean there aren't challenges in the relationship. A lot of these are obvious," Greer said.
The meeting covered other key topics, including plans to "operationalize" a process agreed in May for each side to identify potential tariff cuts on non-strategic goods, called the "Board of Trade."
Greer did not identify a specific list of products that could see such reductions, but he repeated his desire for a "relatively small subset of American and Chinese goods that can be traded in a balanced way, that are non-sensitive."
These would be considered as "a class unto themselves."
Potential candidates among Chinese exports include "consumer goods, low-tech items," he said, while US exports for this treatment could include energy, agricultural goods and medical devices, he added.
Greer and Bessent did not mention any progress on improving the flow of critical minerals to US companies, which US officials have said are insufficient despite Beijing's prior commitments to ease restrictions under last year's US-China trade truce.
The discussions point to more incremental progress in avoiding an escalation of tensions in a delicate trade relationship that has major consequences for the global economy.
"I think status quo is probably both sides' general best expectation," Anna Ashton, a China trade analyst and founder of Ashton Intelligence said prior to the meeting.
UNRESOLVED ISSUES
Bessent and Greer did not provide updates on other issues that are unresolved after the May meeting in Beijing between Trump and Xi, including Chinese pledges to increase purchases of US agricultural goods by $17 billion a year and to purchase more than 200 Boeing aircraft.
Trump and Xi must reach a deal that covers AI safety, said US Representative Ro Khanna, the ranking Democrat on the US House Select Committee on Strategic Competition Between the United States and the Chinese Communist Party.
"The first ask is of Trump and Xi Jinping to come up with an international agreement, and two of the core principles should be one banning any self-improving AI, recursive self-improving AI. … The second is to have safeguards so that AI can't be misused by people for biological nuclear weapons," Khanna said on Sunday, speaking on CBS' "Face the Nation" program.
TARIFF REDUCTIONS, INVESTMENT
China's Ministry of Commerce said on Saturday that He would also lead a delegation of Chinese companies to the US that would participate in economic and trade consultations ahead of the summit.
The business delegation, which mirrors a group of US CEOs that Trump brought to Beijing in May, was announced as Trump expressed openness to Chinese automakers building US factories.
US auto industry groups on Friday urged Trump to maintain an effective ban on Chinese vehicle sales in the US on national security grounds.
(Reporting by David Lawder; Additional reporting by Courtney Rozen in Washington and PJ Huffstutter in Chicago; Editing by Paul Simao, David Goodman, Aurora Ellis and Lincoln Feast.)
