US Offers to Lift Some Chip Controls in Exchange for China Easing Rare Earth Restrictions
The U.S. is willing to lift export controls over certain semiconductors in exchange for China approving exports of rare earths and other critical minerals, a senior Trump administration official said June 9.
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Kevin Hassett, director of the White House’s National Economic Council, said U.S. officials, in talks that began in London June 9, planned to push their Chinese counterparts to lift Chinese export restrictions over rare earths. Trump ordered Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jameison Greer to secure a “handshake” agreement from Chinese officials that they would lift the measures, Hassett said.
“Our expectation is that after the handshake, immediately after the handshake, any export controls from the U.S. will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters,” Hassett said on CNBC.
Asked what kind of export controls the U.S. would lift, Hassett said the administration would not remove controls from the “very, very high end Nvidia stuff,” such as Nvidia’s H20 chip. “That would be a new thing,” he said.
“I'm talking about possible export controls on other semiconductors, which are also very important to them.”
The Trump administration was also reportedly considering lifting export restrictions on jet engines and other technologies, The Wall Street Journal reported. The Bureau of Industry and Security began restricting those items in late May through is-informed letters to individual companies (see 2505290038).
Hassett said the administration is focused on China’s export curbs of rare earths because those exports have been “going a lot slower than some companies believed was optimal.” Trump spoke with President Xi Jinping over the phone, and Hassett said Trump asked for “a handshake that you promise you're going to release these things.”
“And so really, the purpose of the meeting today is to make sure that they're serious, but to literally get handshakes from Scott [Bessent] and Howard [Lutnick] and Jamieson [Greer], our three lead trade negotiators, and get this thing behind us,” Hassett said.
He said China controls “something like 90% of the rare earths and the magnets, and if they're slow rolling” those exports, “then it could potentially disrupt production for some U.S. companies that rely on those things.”
Asked whether the Trump administration expects the talks in London to “bear fruit,” Hassett said he's optimistic. “I expect it to be a short meeting with a big, strong handshake, and we'll see,” he said. “But that's what we're expecting.”
Talks between the two sides stretched into the evening hours in London. No more details were available by our press time.
The talks began two days after China’s Commerce Ministry said it was reviewing export license applications for rare earths "in accordance with laws and regulations."
China "has approved a certain number of compliant applications in accordance with the law, and will continue to strengthen the approval of compliant applications," a ministry spokesperson said June 7, according to an unofficial translation. "China is willing to further strengthen export control communication and dialogue with relevant countries in this regard to promote convenient and compliant trade."
The spokesperson added that China's export controls are in line with "international practice" for restrictions on dual-use items.
"China fully considers the reasonable needs and concerns of various countries in the civilian field, and reviews the export license applications for rare earth-related items in accordance with laws and regulations."