Microchips for Rare Earths: US Seen Easing Chip, Product Curbs to Get China’s Rare Earths
June 10, 2025
Talks going well, Lutnick says; US officials are expected to drop restrictions imposed recently on a range of technology and other products to China in return for better access to rare earth exports
asiafinancial.com
Nvidia's resumption of AI chips to China is part of rare earths talks, says US
By Jarrett Renshaw and Karen Freifeld
July 16, 20256:29 AM GMT+3Updated July 16, 2025
WASHINGTON/BEIJING/HONG KONG, July 15 (Reuters) -
Nvidia's (NVDA.O), opens new tab planned resumption of sales of its H20 AI chips to China is part of U.S. negotiations on rare earths, Commerce Secretary Howard Lutnick said on Tuesday, and comes days after its CEO met President Donald Trump.
"We put that in the trade deal with the magnets," Lutnick told Reuters, referring to an agreement Trump made to restart rare earth shipments to U.S. manufacturers. He did not provide additional detail.
Talks on a high-stakes trade deal between the US and China were going well, US Commerce Secretary Howard Lutnick said on Tuesday.
US and Chinese officials are meeting for a second day in London on an agreement, that is expected to involve US concessions on export controls put on computer chip software and other goods in recent weeks in return for better access to China’s rare earths.
“(Talks went on) all day yesterday, and I expect (them) all day today,” Lutnick told reporters. “They’re going well, and we’re spending lots of time together.”
White House economic adviser Kevin Hassett signalled on Monday that the US could lift recently imposed export controls if China speeds up delivery of rare earth exports.
He told CNBC he expects negotiators from the two sides to achieve a deal that sees China accelerate the export of rare earths and magnets.
The blow-up over rare earths has sparked alarm in boardrooms and factory floors around the world.
Treasury Secretary Scott Bessent, Lutnick and US Trade Rep Jamieson Greer are talking with a Chinese delegation led by Vice Premier He Lifeng.
A second round of negotiations had to be held after a trade truce agreed by both sides in Geneva in mid-May blew up last week amid claims that each failed to adhere to the initial agreement, which led to triple-digit tariffs imposed by both sides in April being slashed and levies paused for 90 days.
In an interview with CNBC television on Monday, Hassett said: “I expect it to be a short meeting with a big, strong handshake. 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, and then we can go back to negotiating smaller matters.”
Car and robotics sectors hit
His remarks stem from the fact the automotive and robotics industries were hit hard by the licensing system imposed on rare earth exports by a branch of China’s Commerce Ministry in April, as well perhaps as Western defence suppliers.
Hassett “suggested that the administration would not loosen restrictions designed to prevent US chipmaker Nvidia from selling high-end chips to groups in China,” CNBC reported. But it looks like the US could revoke some of the moves announced in recent weeks.
President Donald Trump “authorized Treasury Secretary Scott Bessent’s team to negotiate away recent restrictions on the sale of a wide variety of technology and other products to China,” according to sources who spoke to the Wall Street Journal.
“The products covered by recent US restrictions — never publicly announced by the administration — include jet engines and related parts, which China needs to make its own commercial aircraft; software required by Chinese companies to produce chips; and ethane, a component of natural gas important in manufacturing plastics, according to the people,” it said.
Kelly Ann Shaw, a former White House trade adviser during Trump’s first term and now a trade partner at the Akin Gump law firm in Washington, said she expected China to reaffirm its commitment to lift retaliatory measures, including export restrictions, “plus some concessions on the US side, with respect to export controls measures over the past week or two.”
But Shaw said she expected the US to only agree to lift some new export curbs – the halt on shipments of semiconductor design software, chemicals and aviation equipment.
EU ‘green channel
’China has long had a stranglehold on the processing of rare earth elements, a fact Western governments have known for years, but have failed so far to generate a strong response too.
Auto industry suppliers have complained that Beijing’s new licensing set-up is a drawn-out and tedious system, but China’s Commerce Ministry said on Saturday it was willing to create a “green channel” to speed up approvals for firms in the European Union, which is currently negotiating a trade deal with Beijing.
China also approved six-month rare-earth export licences to three big US carmakers – Ford, General Motors and Stellantis, Reuters said on June 6. Ford had been forced to halt production of its Explorer SUV due to the rare-earth shortage, it said.
But Ian Bremmer, president of the Eurasia Group, said while a temporary truce was possible, there was little prospect for the bilateral relationship to become constructive given broader decoupling trends and continued US pressure on other countries to take China out of their supply chains.
“Everyone around Trump is still hawkish and so a breakthrough US-China trade deal is unlikely, especially in the context of other deals that are further along and prioritized,” he said in an analyst note.
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