Lutnick: China Export Controls on Table in Stockholm
Commerce Secretary Howard Lutnick said that where the line should be drawn on export controls will be on the table during negotiations with Chinese officials in Stockholm next week.
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Lutnick said on Bloomberg TV July 23 that the U.S. offered to remove export controls on Nvidia H20 chips in exchange for China loosening export restrictions on rare earth magnets (see 2507150013).
He noted that the Biden administration allowed the chips to be exported to Chinese buyers, "and then we came in, we said, 'Woah, woah, woah, that's a pretty powerful chip," but now, given that the H20 has fallen to the fourth-best chip, and is comparable to Huawei's best, "The president has decided that if things are going well with China, that they can buy them. So I think that decision has been made."
Lutnick said China and the U.S., two giant economies, "should trade with each other." He also said Chinese consumers "want to buy our produce. ... We want inexpensive things on our shelves." However, he said there is a limit to what each country is willing to sell to each other, as rival countries.
"They're not going to sell us their hypersonic missiles, and we're not going to sell them our best chips."
He said the question is: "Where's that line? Are the H20 below that line? That's nuanced."
A Chinese Ministry of Commerce spokesperson said July 23 that the two sides, during their trade talks in Sweden, will "give full play to the role of the China-US economic and trade consultation mechanism, and continue to conduct consultations on economic and trade issues of mutual concern in the spirit of mutual respect, peaceful coexistence and win-win cooperation," according to an unofficial translation. Treasury Secretary Scott Bessent said earlier this week that the U.S. hopes to bring up the issue of Beijing continuing to buy oil from Iran and Russia (see 2507210009).