June 24, Kathmandu – US Treasury Secretary Scott Bessent stated that China advancing ahead of the US in artificial intelligence (AI) technology represents the “greatest risk” in this sector. According to him, concerns such as job losses or other security issues are secondary compared to this risk. Speaking at the Economic Club of New York, Secretary Bessent said, “The biggest risk in AI is China surpassing us.”
He asserted that China’s willingness to engage in talks about AI confirms America’s technological leadership in the field. He added, “I am leading our AI policy efforts and also hold primary responsibility for economic relations with China. The only reason the Chinese are willing to communicate about AI is because we are ahead of them, so we must always stay in front.” Last month, following discussions in Beijing between US President Donald Trump and Chinese leader Xi Jinping, both countries agreed to hold formal talks on AI governance.
In May, Chinese Foreign Ministry spokesperson Guo Jiakun highlighted that as the two leading powers in AI, China and the US must collaborate on AI development and governance for the advancement of human civilization and the well-being of the international community. Despite significant public discontent in the US regarding domestic data center construction, job displacement, security, excessive water consumption, and rising electricity costs, the Trump administration has centered its AI strategy on competing with China.
Washington regards rapid development of AI infrastructure as a critical national security priority. To maintain technological superiority, the Trump administration continues rigorous controls on the export of advanced AI chips to China. In his remarks, Bessent warned that if the supply chain is weaponized—without explicitly naming China—the US will respond firmly. He clarified that efforts involving technology theft, sanctions evasion, market manipulation, or intimidation of US partners will be met with appropriate countermeasures.
This statement from the US Treasury Secretary comes a day after China imposed export restrictions on 10 US entities, including major rare earth companies MP Materials and USA Rare Earth. This marks the most severe tension since the temporary truce on critical minerals reached last year between Washington and Beijing. Additionally, after the Pentagon classified key Chinese tech firms as military-linked, China retaliated on Monday by blacklisting 46 US companies, barring them from participating in government procurement processes. Under new rules, no global institution or individual may transfer dual-use materials produced in China to these restricted American firms. China holds near-monopoly control over 17 key rare earth elements essential for electric vehicles, robotics, electronics, and defense systems, leveraging this as a strategic weapon.
Secretary Bessent emphasized that the US must lead in AI, quantum computing, shipbuilding, and critical minerals sectors. He added that the Trump administration is working to build resilient supply chains capable of withstanding any future pandemic, crisis, or conflict.
