US-China deal doesn't tackle some rare-earths restrictions: Reuters

The news: The trade agreement struck by the US and China last week left key issues on export restrictions tied to national security unresolved, Reuters reported citing unnamed sources. The omission could threaten a more comprehensive deal between the nations.

The context: The report found that China did not commit to granting export clearance for select rare-earth magnets needed by US military suppliers in fighter jets and missile systems. The US maintains export curbs on China’s purchases of advanced artificial intelligence chips due to concerns that they have military applications.

At the London talks, US officials reportedly signalled that they may look to extend existing tariffs on China for a further 90 days beyond the 10 August deadline which had been agreed to in Geneva in May. China promised to fast-track approval of rare-earth export applications from non-military US manufacturers (thousands of applications are currently pending), a Reuters source said, and that the licenses will have a six-month term. Beijing also said it could establish a "green channel" for speeding up license approvals from trusted US companies.

On Wednesday, Chinese rare-earths magnet producer JL MAG Rare-Earth said it had obtained export licences that included the United States, while China's Commerce Ministry confirmed it had approved some "compliant applications" for export licences. But China has not changed its position on specialised rare earths, including samarium, which are needed for military applications and are outside the fast-track scope agreed to in London.