Export clearance for crucial magnets stands in the way of a more comprehensive deal

Export clearance for crucial magnets stands in the way of a more comprehensive deal

- 

BEIJING/SINGAPORE - The renewed US-China trade truce struck in London left a key area of export restrictions tied to national security untouched, an unresolved conflict that threatens a more comprehensive deal, two people briefed on detailed outcomes of the talks told Reuters.

Beijing has not committed to grant export clearance for some specialized rare-earth magnets that US military suppliers need for fighter jets and missile systems, the people said. The US maintains export curbs on China's purchases of advanced artificial intelligence chips out of concern that they also have military applications.

At talks in London last week, China's negotiators appeared to link progress in lifting export controls on military-use rare earth magnets with the longstanding US curbs on exports of the most advanced AI chips to China. That marked a new twist in trade talks that began with opioid trafficking, tariff rates and China's trade surplus, but have since shifted to focus on export controls.

US officials also signaled they are looking to extend existing tariffs on China for a further 90 days beyond the Aug 10 deadline agreed in Geneva in May, both sources said, suggesting a more permanent trade deal between the world's two largest economies is unlikely before then.

The two people who spoke to Reuters about the London talks requested not to be named because both sides have tightly controlled disclosure.