US-China Trade Pact Leaves Military Use Rare Earth Issue Unresolved - Reports

The renewed US-China trade truce that came to fruition in London has left a pertinent area linked to national security untouched, an unresolved matter that makes a comprehensive pact all the more difficult, two people briefed on detailed outcomes of the talks told Reuters.

China has not yet committed to approve export clearance for some specialised rare-earth magnets that US military suppliers need for fighter jets and missile systems, as per a Reuters report. Meanwhile, the United States maintains export curbs on China's purchases of advanced artificial intelligence chips out of concern that they also have military applications.

At talks in London last week, China's negotiators appeared to link progress in lifting export controls on military-use rare earth magnets with the longstanding US curbs on exports of the most advanced AI chips to China. That marked a new twist in trade talks that began with opioid trafficking, tariff rates and China's trade surplus, but have since shifted to focus on export controls.

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In addition, US officials also signalled they are looking to extend existing tariffs on China for a further 90 days beyond the August 10 deadline agreed in Geneva last month, both sources said, suggesting a more permanent trade deal between the world's two largest economies is unlikely before then.

The two people who spoke to Reuters about the London talks requested not to be named because both sides have tightly controlled disclosure. The White House, State Department and Department of Commerce did not immediately respond to requests for comment. China's Foreign and Commerce ministries did not respond to faxed requests for comment.

President Donald Trump said on Wednesday the handshake deal reached in London between American and Chinese negotiators was a "great deal," adding, “we have everything we need, and we're going to do very well with it. And hopefully they are too.”

US Treasury Secretary Scott Bessent said there would be no "quid pro quo" on easing curbs on exports of AI chips to China in exchange for access to rare earths.