China Rare Earths Issue Remains Unresolved, US Lawmaker Says

(Bloomberg) — The US-China dispute over Beijing’s control of rare earth supplies has yet to be resolved, the head of a visiting US congressional delegation said after meeting Chinese officials, signaling a key irritant persists in bilateral relations.

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Representative Adam Smith described continuing challenges on the matter in a press briefing on Tuesday in the Chinese capital, where he’s leading the first official visit by US House lawmakers since 2019 as relations steady before a potential meeting between the countries’ presidents.

“I don’t think we resolved the rare earth question,” Smith said, without specifying what the sticking points are. “I think that that still needs to be worked on.”

China dominates the global supply and processing of the minerals, which are vital for everything from electric vehicles to advanced weaponry. Beijing has used its position as a strategic lever as trade tensions with the Trump administration escalated earlier this year.

The two governments reached a framework agreement in June that includes a Chinese commitment to review applications for shipping rare earth magnets, although few details of the deal have been disclosed. US Trade Representative Jamieson Greer last week said supplies to his country had “bounced back up significantly,” although European companies have complained about shortages that threaten to halt production.

Smith also struck a note of caution in response to a reporter’s question about whether Beijing-based ByteDance Ltd. will have any role in maintaining the app’s algorithm in the US. Citing privacy and security concerns, he said the matter has “not been 100% resolved,” while adding that he wasn’t privy to the negotiations.

The US and China are nearing an agreement to hive off the US operations of social media platform TikTok to a consortium that includes software giant Oracle Corp. Under the spin-off arrangement being discussed, TikTok will be majority-owned and controlled by Americans, according to White House Press Secretary Karoline Leavitt. Many of the finer details of the agreement have yet to be made public.

Joined by US Ambassador to China David Perdue, the delegation’s visit may build more goodwill ahead of a possible sitdown between US President Donald Trump and Chinese President Xi Jinping next month in South Korea. Throughout the trip, both sides expressed support for more engagements, with Beijing Mayor Yin Yong calling for more sub-national exchanges in a Wednesday meeting.

The world’s two largest economies are in the final stages of negotiations for a “huge” Boeing Co. aircraft order, Perdue said at the Tuesday briefing. Such a deal, which has been years in the making, would be the centerpiece of a trade agreement between the two nations but has been contingent on an easing in tensions.

On the security front, Smith, the top Democrat on the House Armed Services Committee, urged Beijing to engage in talks over its “rapidly growing nuclear arsenal” to prevent miscalculation.

“When you’re getting up into the hundreds, close to 1,000 on nuclear weapons, it’s time to start having a conversation about it to make sure that we understand each other,” Smith said. He stressed the need for better military-to-military dialogue, a message he delivered in meetings with Chinese officials including Premier Li Qiang since the delegation arrived on Sunday.

During the trip, the US delegation has also discussed the flow of fentanyl and called for fair access to China’s market for US firms.

The group met with National People’s Congress Chairman Zhao Leji and Foreign Minister Wang Yi later on Tuesday.

Wang praised the exchanges between the two heads of state for steadying relations and called on both sides to uphold them.

“Their conversations have set the tone and chartered the course for the bilateral relationship. In the recent period, this relationship has stabilized,” Wang said in his opening remarks. “This is not easy. We need to preserve this.”

(Updates with US delegation’s meeting with Yin Yong.)

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