US Ambassador to China Perdue says NVIDIA (NVDA) affair shows that US should stay diligent on China, adds China says it's to firmly safeguard multilateral trading system, and will uphold most favored nation treatment

• China's licensing regime for magnets is hugely escalatory.
• US is not getting the flow of magnets that it wants from China.
• US and China militaries are beginning to talk again.

Ambassadorial commentary of this kind sits in the middle tier of the US-China signalling hierarchy: below presidential or cabinet-level statements, but a recognised channel for registering grievances without escalating to formal action. The substantive content here is the rare earth and magnet licensing regime, which Beijing has used before as leverage in trade disputes; past episodes have shown that licensing friction transmits through lead times and defence and auto supply chains well before it shows up in any trade data, and that the chokepoint matters precisely because processing capacity is concentrated. The framing of the chip affair as a diligence lesson keeps export controls on the bilateral agenda rather than resolving them. The counterweight in the remarks is the resumption of military-to-military communication, which in prior cycles has been the standard marker that both sides are managing escalation risk even while trade friction runs. The usual sequence in these episodes is rhetorical escalation, working-level negotiation on licensing throughput, then partial relief; the tells are whether the complaints move from an ambassador to the trade representative's office and whether license approvals actually slow at the shipment level.