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A top White House official has said US President Donald Trump would ease restrictions on selling chips to China if Beijing agreed to speed up the export of rare earths, as the two countries began high stakes trade talks in London.
Kevin Hassett, director of the White House National Economic Council, said he expected US and Chinese negotiators to reach a deal that would result in China accelerating the export of rare earths and magnets.
Washington had accused Beijing of reneging on a deal on rare earths reached in Geneva last month as part of the ceasefire in the US-China trade war.
Treasury secretary Scott Bessent is leading the US team in the talks that opened in London on Monday. Trade representative Jamieson Greer and commerce secretary Howard Lutnick are also part of Washington’s delegation. The Chinese delegation is led by He Lifeng, a vice-premier.
“I expect it to be a short meeting with a big, strong handshake,” Hassett told CNBC television on Monday after the trade talks had started. “Our expectation is that . . . immediately after the handshake, any export controls from the US will be eased and the rare earths will be released in volume.”
His comments were the first suggestion that Trump was willing to put export controls on the negotiating table.
It would mark a significant departure from Joe Biden’s administration, which introduced sweeping export controls designed to make it harder for China to obtain advanced US chip technology that could help its military.
Hassett did not specify which exports controls would be eased, but suggested that the administration would not loosen restrictions designed to prevent US chipmaker Nvidia from selling high-end chips to groups in China.
The Financial Times reported last month that the Trump administration was planning to put a number of Chinese chipmakers on a commerce department export blacklist, but that some officials wanted to hold off because they believed the move would have a negative impact on US-China trade talks following the “ceasefire”.
The two sides agreed in Geneva to cut significantly the tariffs they had put on each other for 90 days following concerns about their impact on bilateral trade and global supply chains.
The FT reported on Monday that Chinese exports to the US plunged in May by the most since the start of the Covid-19 pandemic in 2020.
Hassett said Beijing had been “slow rolling” rare earth exports, which had become a “very significant sticking point” following the deal in Geneva. He said the issue was part of the more than hour-long telephone call that Trump held with China’s President Xi Jinping on Friday.
China has repeatedly slammed US export controls. But its willingness to use rare earths to put pressure on the US in recent months is the first time that it has used them in a serious way against American companies.
