China puts six-month limit on its ease of rare-earth export licenses

China is putting a six-month limit on rare-earth export licenses for US automakers and manufacturers, according to people familiar with the matter, giving Beijing leverage if trade tensions flare up again while adding to uncertainty for American industry, The Wall Street Journal said, Report informs.

Beijing’s agreement to temporarily restore rare-earth licenses was one of the key breakthroughs in the latest round of intense trade talks in London, but the six-month limit illustrated how each side is retaining the tools to easily escalate tensions again.

In exchange for the Chinese easing rare-earth curbs for now, the people said, US negotiators agreed to relax some recent restrictions on the sale to China of products such as jet engines and related parts, as well as ethane, a byproduct of natural gas and oil drilling important in manufacturing plastics.

Details of the framework to uphold an interim agreement forged in Geneva last month are still being worked out, the people said. The White House declined to comment.

According to people who consult with Chinese officials, Beijing wants to retain its chokehold on the critical minerals to give it valuable ammunition for future negotiations.

During the London meetings, China agreed to start approving rare-earth license applications for US companies right away, pending the signoff of President Trump and Chinese leader Xi Jinping on the trade framework, according to a person with direct knowledge of the matter. The earliest an application could be approved is within a week of the two leaders officially signing off on the framework originally established in the meetings last month in Geneva, this person said.

The person also noted that as China approves the applications, the US will start to drop its countermeasures, including export controls on the jet engines and ethane.