The renewed trade truce between the US and China has not touched on one of the key issues - restrictions on the export of rare-earth magnets, which play a key role in the defense sector, reported the agency Reuters.
Beijing has not committed to allowing the export of some specialized rare-earth magnets that U.S. military suppliers need to make fighter jets and missile systems, the people said. At the same time, the United States maintains restrictions on exports to China of advanced artificial intelligence chips, fearing they could be used for military purposes.
During talks in London last week, Chinese negotiators, according to sources, made it clear that willingness to allow exports of magnets for military purposes would depend on progress in lifting US restrictions on exports of advanced AI chips to China.
This added a new dimension to the talks, which initially focused on opioid smuggling, tariffs and China's trade surplus, but are now focused on export controls.
In addition, U.S. officials have signaled that they plan to extend existing tariffs on Chinese goods for another 90 days beyond the Aug. 10 deadline agreed in Geneva last month, the sources said, suggesting that a permanent trade deal between the world's two largest economies is unlikely to be reached before then.
President Donald Trump on Wednesday called the agreement reached in London a "great deal," adding: "We have everything we need, and we will benefit from it. And hopefully they will too."
And US Treasury Secretary Scott Bessant said there would be no "barter agreement" — that is, the US will not relax restrictions on the export of AI chips to China in exchange for access to rare earth materials.
