U.S., China reach trade 'gentleman's agreement' but AI tensions mount: CSIS

• The US-China Economic and Security Review Commission visited China to increase understanding, with the last visit being in 2019.
• A 'gentleman's agreement' was reportedly reached to stabilize trade, with expectations that US tariffs on China will return to approximately 20% using Section 301, but not escalate further.
• AI is highlighted as a new area of tension, with the US accusing China of 'AI distillation' and concerns about Chinese AI firms' access to chips.
• Separating commercial issues from national security in the context of advanced AI models is deemed a 'quite a challenge' due to the dual-use nature of the technology.

The US-China Economic and Security Review Commission's visit to China aims to foster understanding ahead of a potential Xi-Trump summit. While a 'gentleman's agreement' was reached to stabilize trade, with tariffs expected to revert to previous levels, AI is emerging as a significant point of friction. Separating commercial interests from national security in AI will be a considerable challenge.