Trump links easing chip restrictions to speeding up Chinese rare earth exports in London talks.
A senior official at the White House revealed President Donald Trump's intention to ease restrictions on chip exports to China in exchange for Beijing's commitment to accelerate shipments of rare metals. This was during the bilateral trade talks that started between the two sides in the British capital on Monday, June 9th.
Kevin Hassett, Director of the National Economic Council at the White House, explained in a statement to CNBC that American and Chinese negotiators are seeking an agreement to ensure a faster flow of rare metals and Chinese magnets to global markets.
He added, "We expect the meeting to be short with a strong handshake. Once that happens, we will ease US export controls, and China will release large quantities of rare metals."
Washington accused Beijing of backtracking on the Geneva agreement signed last month, which involved reducing tariffs for 90 days as part of a "truce" in the ongoing trade war between the two countries.
Hassett pointed out that China's slowdown in exporting rare metals, which are a vital component in technological and military industries, has become a "major point of contention," especially after the lengthy phone call between Trump and Chinese President Xi Jinping last Friday.
Heading the American delegation in the talks are Treasury Secretary Steven Mnuchin, along with Trade Representative Jameson Greer and Commerce Secretary Howard Lutnick, while the Chinese side is led by Vice Premier He Lifeng.
Despite hints of accelerated exports, Hassett confirmed that the administration will not back down on restrictions imposed on Nvidia to prevent it from selling advanced chips to Chinese entities.
This move marks a radical shift from the policies of the Joe Biden administration, which tightened chip export controls to cut off the Chinese military.
The Financial Times previously revealed Washington's intention to blacklist Chinese chip companies, but some officials preferred to postpone this out of fear of its impact on negotiations.
The talks come at a time when Chinese exports to the United States recorded a sharp decline in May - the largest since the 2020 COVID-19 pandemic, according to the same newspaper. It is noteworthy that Beijing, which has repeatedly criticized US restrictions, resorted for the first time to using rare metal exports as a pressure tool in recent months, a move considered an unprecedented escalation in the trade dispute.
