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yesterday

London Trade Truce Fails to Secure U.S. Access to Military-Grade Rare Earth Magnets

China will fast-track licenses for non-military rare earth exports with military-grade magnet restrictions left untouched.

U.S-China trade pact | Image: Unsplash
Media members stand outside the Lancaster House, on the second day scheduled for trade talks between the U.S. and China, in London, Britain, June 10, 2025. REUTERS/Toby Melville/File Photo
A man works at the site of a rare earth metals mine at Nancheng county, Jiangxi province, China, October 20, 2010. To match Insight ELECTRIC-CAR/COMMODITIES REUTERS/Stringer/File Photo CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA/File Photo

Overview

  • London talks in June extended a 90-day tariff truce but left export restrictions on specialized samarium magnets needed for U.S. fighter jets and missile systems unresolved.
  • China committed to fast-track approvals for non-military rare earth export applications, offering six-month licenses and a green channel for trusted U.S. firms.
  • Chinese negotiators tied lifting of curbs on military-grade magnets to U.S. export controls on advanced AI chips, a linkage U.S. Treasury Secretary Scott Bessent said did not involve any quid pro quo.
  • Both sides signaled plans to extend existing tariffs beyond the August 10 deadline, dimming prospects for a broader U.S.-China trade agreement this summer.
  • In response to Beijing’s mineral leverage, U.S. officials are boosting domestic rare earth production while partners like India seek alternative suppliers and develop their own capacity.