US, China agree on trade, AI and military hotline during Xi visit

Washington and Beijing agreed on trade, investment, AI and military communication steps during Xi Jinping's US visit. The decisions signal a managed effort to reduce friction while keeping strategic rivalry in check.

In Short

• Both sides said Iran must never be allowed a nuclear weapon
• They opposed any country imposing tolls on international waterways and routes
• Washington pressed Beijing to restore rare earth shipments and ease shortages

The United States and China have agreed on a set of steps covering trade, investment, artificial intelligence and military crisis communication during Chinese President Xi Jinping's visit to the US. The two sides also said Iran can never have a nuclear weapon and that no country or institution should be allowed to impose tolls on international waterways.

In separate statements issued in Washington and Beijing, the two countries said they would set up a dialogue on AI-related incidents, operationalise boards of trade and investment, and move ahead with a reciprocal tariff reduction arrangement covering USD 30 billion of non-sensitive goods in each direction. Xi, who arrived in Washington on Wednesday for a three-day visit, returned to Beijing on Friday.

China's Foreign Ministry said the two sides agreed to sign a memorandum of understanding on strengthening crisis communications and preventing crises between their militaries. On AI, the leaders agreed to establish a China-US AI dialogue to exchange views on risks and benefits, with the next round to be held in November. The Chinese readout also said a communication channel for AI-related incidents would be set up. The White House fact sheet said the two leaders agreed to use the term super intelligence rather than artificial intelligence to describe the applicable emerging technologies.

Under the Board of Trade, the two countries reached consensus on recommendations for more favourable tariff treatment for USD 30 billion of non-sensitive goods in each direction, according to the White House. It said the two sides had also set up the Board of Investment to discuss potential investment opportunities and impediments, and to provide a structured channel to address commercially meaningful investment-related issues.

The White House said Trump urged Xi to increase production of refined petroleum products to stabilise global supply. The Chinese Foreign Ministry said both countries were continuing to work on US concerns over supply chain shortages linked to rare earths and other critical minerals, with the aim of ensuring shipment levels return to appropriate levels. China had imposed export controls on rare earths last year in response to US tariffs, reducing supplies sent to the US and other countries.

The two leaders also agreed to meet at the Asia-Pacific Economic Cooperation summit in Shenzhen in November, and later at the G20 at the Trump National Doral Miami golf club in Florida. The US statement said it welcomed China's move to add export controls for two more precursor chemicals for fentanyl, and that both sides noted law enforcement had recently made arrests in fentanyl-related cases. Overall, the visit produced agreements across security, trade, technology and supply chains, while also setting up the next round of engagement between the two countries.

With PTI Inputs

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