PARIS - Senior economic officials from the United States and China concluded the first of two days of talks in Paris on Sunday, aiming to resolve outstanding issues from last year's trade truce and to set the stage for a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the end of March.
The sessions, led by U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, were held at the Paris headquarters of the Organisation for Economic Co-operation and Development (OECD). Negotiators said the agenda included U.S. tariff adjustments, the flow of Chinese-produced rare earth minerals and magnets to U.S. buyers, U.S. export controls on high-technology goods, and Beijing’s commitments to purchase U.S. agricultural products.
A Treasury spokesperson confirmed that the delegations met for more than six hours on Sunday and that talks would resume on Monday morning. The spokesperson did not provide details on the character of discussions. Chinese officials left the OECD site without briefing reporters.
Objectives and participants
The principal negotiators present in Paris included Secretary Bessent and Vice Premier He, together with U.S. Trade Representative Jamieson Greer and China trade negotiator Li Chenggang. U.S. officials said the meetings follow a sequence of prior encounters in European cities last year intended to prevent a breakdown in trade relations between the world's two largest economies.
Before departing for Paris, U.S. Trade Representative Jamieson Greer told CNBC that Washington seeks stability in the bilateral relationship. He said U.S. priorities include ensuring continued availability of rare earths for the U.S. manufacturing base, maintaining Chinese purchases of U.S. goods, and giving the two presidents a chance to meet and assess the direction of the relationship.
Limits to progress
Trade analysts cautioned that the tight timetable and competing geopolitical distractions reduce the likelihood of a sweeping trade breakthrough either in Paris or at the Beijing summit. Observers noted that U.S. attention is focused on the U.S.-Israeli war on Iran, a factor that constrains bandwidth for high-stakes trade concessions.
Scott Kennedy, a China economics specialist at the Center for Strategic and International Studies in Washington, said both sides appear to have a minimum objective: preserve the relationship and prevent a rupture that would re-escalate tensions. Kennedy added that President Trump may hope to secure large Chinese purchases - such as new Boeing aircraft and greater volumes of U.S. liquefied natural gas and soybeans - but that such commitments could require concessions on U.S. export controls.
Officials noted that Trump and Xi could meet multiple times later in the year, including at a China-hosted APEC summit in November and a U.S.-hosted G20 summit in December. Those meetings could provide additional opportunities for concrete progress, negotiators said.
Iran war and energy security
Officials said the Iran war and its impact on oil markets was likely to be raised in Paris, particularly given the spike in oil prices and concerns about the closure of the Strait of Hormuz - a route that supplies about 45% of China's oil. Secretary Bessent on Thursday announced a 30-day waiver of sanctions to permit the sale of Russian oil stranded at sea in tankers, a step intended to boost available supplies.
On Saturday, President Trump urged other nations to help protect shipping in the Strait of Hormuz after U.S. strikes hit military targets on Iran's Kharg Island oil loading hub and Iran threatened retaliation. China’s state-run Xinhua news agency published a commentary saying that "meaningful" progress in Sino-U.S. economic cooperation could help restore confidence to an increasingly fragile global economy.
Reviewing the Busan trade truce
Officials in Paris were expected to review implementation of commitments made under the October 2025 trade truce declared by Presidents Trump and Xi in Busan, South Korea. The Busan understanding halted a further major flare-up in tensions, scaled back certain U.S. tariffs on Chinese imports, and paused for one year China's draconian export controls on rare earths.
The agreement also suspended an expansion of a U.S. blacklist that would bar selected Chinese companies from buying U.S. high-technology goods, including semiconductor manufacturing equipment. Under the deal, China agreed to buy 12 million metric tons of U.S. soybeans in the 2025 marketing year and 25 million tons in the 2026 season, which begins with the autumn harvest.
U.S. officials, including Secretary Bessent, said China has so far met its obligations under the Busan deal, pointing to soybean purchases that met initial targets. Nevertheless, access to rare earths has been uneven across sectors. While some industries are obtaining Chinese rare earth exports, U.S. aerospace and semiconductor companies report worsening shortages of specific materials, including yttrium, which is used in heat-resistant coatings for jet engines.
"U.S. priorities will likely be about agricultural purchases by China and greater access to Chinese rare earths in the short term," said William Chou, a senior fellow at the Hudson Institute in Washington.
New trade investigations and potential tariffs
Negotiators arrived in Paris with new irritants on the table. U.S. officials have opened a "Section 301" investigation into alleged unfair trade practices tied to excess industrial capacity affecting China and 15 other major trading partners, a probe that could lead to a fresh round of tariffs within months.
Separately, U.S. trade authorities launched an inquiry into alleged forced labor practices across 60 countries, including China. That probe could result in new tariffs on goods from countries judged to be failing to enforce anti-forced labor laws - a point U.S. officials emphasized in outlining enforcement priorities. The inquiry into forced labor is expected to target potential tariff measures rather than outright import bans.
These probes are intended to rebuild tariff leverage after a U.S. Supreme Court ruling struck down the Trump administration's global tariffs imposed under an emergency law as illegal. The court decision effectively reduced previous tariffs by 20 percentage points, prompting the administration to immediately impose a 10% global tariff under a different trade statute.
China denounced the new investigations and reserved the right to take countermeasures. State-run China Daily's editorial described the inquiries as unilateral actions that complicate negotiations, while Xinhua wrote that the talks in Paris represent both an opportunity and a test, noting that progress will largely depend on Washington approaching negotiations with a rational and pragmatic mindset and acting in line with the principles that underpin stable China-U.S. economic relations.
What to watch next
Delegations reconvened Monday to continue discussions. Key indicators to monitor include any movement on rare earth access for U.S. manufacturers, concrete timelines or volumes for Chinese agricultural purchases beyond already-noted soybean deliveries, and whether U.S. export-control posture on high-tech goods is softened in exchange for firm purchase commitments.
Market participants and supply-chain managers alike will watch for signs that aerospace and semiconductor companies can secure more reliable supplies of critical materials such as yttrium, and for indications of whether the U.S. probes into excess capacity and forced labor will translate into new tariff measures - outcomes that could reshape cost and sourcing decisions across manufacturing, energy and agriculture.
Correction noted in official communications: the probe into forced labor practices is expected to be able to impose new tariffs, rather than to institute import bans.