Hong Kong China placed a ban on selling vital minerals, such as gallium, germanium, and antimony, to the United States, a daring action that escalates the tech war between the world’s biggest economies. Following the Biden administration’s recent tightening of Chinese access to cutting-edge American technologies, which marked a sharp increase in supply chain warfare, the announcement was made on Tuesday.
China’s Ministry of Commerce used the materials’ dual military and civilian uses as justification for the prohibition. Stricter restrictions on graphite exports are another aspect of this measure. China leads the world in the production of these minerals, which are necessary for the manufacture of electronics, weapons, and cutting-edge technology like fiber optics and infrared systems.
This decision draws a parallel to an embargo by China in 2010, when it halted exports of rare earths to Japan during a territorial dispute. Disruptions were majorly felt in Japan’s manufacturing sector. The United States, although somewhat less vulnerable due to diversified supply sources like Japan and Germany, is even more reliant than ever on China for those critical materials. For example, the U.S. depends on China for 54% of its germanium supply, and there has been no domestic production of gallium since 1987.
The ban is part of China’s widening pushback against more stringent U.S. policies. The move followed a U.S. clampdown on Chinese technology this Monday that included bans on some chip sales as well as restrictions on more Chinese companies. Chinese industry groups were quick to respond by urging local firms to reduce dependence on U.S. chips, a move that could adversely impact American semiconductor giants such as Micron and Intel.
While China’s actions aim to exert leverage, they may backfire. Past restrictions prompted nations like Japan to develop alternative suppliers. Experts suggest a similar diversification could mitigate U.S. reliance on Chinese minerals. As both nations pursue aggressive policies, economic conflict looms, with far-reaching implications for global supply chains and technological innovation.
