U.S.-China trade truce leaves military-use rare earth issue unresolved, sources say

A fresh US-China trade Trus in London left a major area of ​​export sanctions tied to national security, an unresolved conflict that threatens a more comprehensive deal, two people informed the detailed results of the dialogue. Reuters.

Beijing has not committed to provide export withdrawal to certain rare-earth magnets that American military suppliers are required for fighter jets and missile systems, people said. The United States maintains an export curb on the purchase of China’s advanced artificial intelligence chips, which is out of the concern that they also have military applications.

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In a conversation in London last week, Chinese dialogues appeared to add progress in lifting export control over the rare earth magnets with military-use rare earth magnets on the export of the most advanced AI chips in China. It marked a new twist in trade talks that began with opioid smuggling, tariff rates and China’s trade surplus, but have been transferred to focus on export control since then.

In addition, US officials also indicated that they are trying to expand the existing tariffs on China for 90 days beyond the time limit of 10 August last month, both sources said, “Suggesting a more permanent trade deal between the world’s two largest economies, it is unlikely.

Two people who used to talk Roots London talks were requested not to be named as the two sides have tightly controlled the disclosure. The White House, the Department of External Affairs and the Department of Commerce did not immediately respond to the remarks requests. China’s Foreign and Commerce Ministries did not respond to the requests made faxed for comments.

President Donald Trump said that the deal reached London between American and Chinese dialogues on Wednesday was a “great deal”, “We have everything that we need, and we are going to do very well with it. And hopefully they are also.”

And American Treasury Secretary Scott Besent said that there will be no “Quid Pro Quo” to reduce China on the export of AI chips in exchange for rare Earth.

China Chokhold

But China’s choke on the rare earth magnet required for arms systems remains a possible flashpoint. China dominates the global production of the rare Earth and has a virtual monopoly on refinement and processing.

In April, crushing the level of triple-conten on Beijing restrictions on the export of important minerals that sizes in April led to a deal in Geneva last month to reduce bilateral tariffs.

This inspired the Trump administration to respond with export control, which prevents the shipment of semiconductor design software, jet engines for Chinese -made aircraft and other items for China.

At London talks, China promised non-monkey American manufacturers to rapid track approval of rare-earth export applications, which were currently one of the thousands of sources pending. Those licenses will have a six -month term. Beijing also offered to set up a “Green Channel” from reliable American companies to accelerate license approval.

Early signs were positive, Chinese rare-earth magnet manufacturer JL Mags with rare-earth, on Wednesday, obtained this export license that included the United States, while China’s Commerce Ministry confirmed that it had approved some “obedient applications” for export licenses.

But China said not on the special rare earth, including Samarium, which are essential for military applications and are outside the Fast-Tract agreed in London. Automkers and other manufacturers require mass other rare earth magnets, including dysproosium and terbium.

Major issues remain

A call was received between Trump and Chinese leader Xi Jinping last week at the trade meeting in London. Trump said the US tariff would be set to 55% for China, while China had agreed to 10% with the United States.

Trump initially imposed tariffs on China as a punishment for its massive trade surplus for the United States and who says that Beijing failure to stop the flow of powerful opioid fentanyl in the US.

The Chinese analysts agreed in Geneva are pessimistic about the possibility of further successes before the August 10 deadline.

“Temporary mutual housing of some concerns is possible, but the fundamental issue of business imbalance is possible within the limit of some concerns,” said Liu Vedong, US-China expert at the Institute of American Studies, Chinese Academy of Social Sciences. Said.

The expansion of the August deadline may give more time to establish an alternative legal claim to the Trump administration to establish a high tariff on China under Section 301 Authority of the USTR, the Trump loses a legal challenge for tariffs in the US court, one of the people with London talks said.

Unresolved issues underlined the difficulty of the Trump administration in furthering their trade agenda with China as the desire to use it as a desire to use Beijing’s rare earth and use it as a vandal with Washington, said Ryan Hass, director of John El Thornon China Center at Brookings Institution.

“The Trump has taken some punches in the nose to believe the Trump team that they will no longer be able to secure another trade agreement with China, which addresses Trump’s priorities.”