China has announced that it will halt the export of several rare minerals to the United States, escalating the ongoing technological and trade conflict between the two largest global economies. This move, made on Tuesday, follows the Biden administration’s recent expansion of restrictions on advanced technology sales to China, marking a significant step in Beijing’s efforts to retaliate against U.S. policies.
The banned materials include gallium, germanium, antimony, and certain superhard materials, all of which are essential for producing semiconductors, weapons, and advanced technology. China’s Ministry of Commerce explained that these minerals have both civilian and military uses, and their export will be stopped immediately. Additionally, exports of graphite will face stricter review and scrutiny.
China’s Strategic Grip on Critical Materials
China plays a crucial role in the global supply of rare minerals, controlling a significant portion of the market. These minerals are essential for manufacturing cutting-edge technologies, including semiconductors and military equipment. Beijing’s decision to restrict their export is part of a broader strategy to limit access to materials that are critical for both civilian and military industries.
In recent years, China has steadily tightened its control over key materials. For instance, last year, it introduced new regulations governing the export of gallium and germanium, which are both vital for semiconductor production. In September, antimony was also added to China’s list of restricted materials due to its use in military explosives. Furthermore, China’s exporters of rare earth metals, essential for high-tech industries ranging from smartphones to smart bombs, now must provide detailed reports on how these materials are being used in Western supply chains.
These actions are part of China’s retaliation for increasing U.S. restrictions, which have been in place since the Trump administration. While China previously refrained from imposing sweeping export bans, this latest move signifies a shift toward more direct responses to U.S. economic policies.
Impact on U.S. Technology and Defense Sectors
The ban on superhard minerals such as tungsten has raised particular concern in the U.S., where these materials are essential for manufacturing armor-piercing ammunition and other military applications. Tungsten is critical for U.S. defense systems, and China’s control over its supply could create significant challenges. Although the U.S. is working to find alternative sources for tungsten, the process could take several years to establish new mining operations domestically.
In addition, antimony prices have surged due to China’s restrictions, reflecting the growing global scarcity of this material. The U.S. Geological Survey reports that China supplies over 50% of the germanium used in the U.S., which is necessary for infrared technology and fiber optics. Similarly, the U.S. has relied on China for 21% of its gallium imports, a key component in semiconductor production. With the U.S. no longer mining gallium domestically since 1987, this export ban could have a major impact on American semiconductor manufacturers.
Retaliatory Measures and Global Implications
The recent export restrictions by China are part of a broader pattern of retaliatory actions in response to U.S. policies. In addition to banning rare mineral exports, the Biden administration has expanded its curbs on certain technology sales to China. These measures include prohibiting the sale of specific chips and machinery, while also adding more than 100 Chinese companies to a restricted trade list. The goal of these actions is to prevent China from advancing in key technological fields like artificial intelligence, telecommunications, and semiconductor production.
China has strongly criticized these measures, calling them “illegal” and harmful to global trade stability. Chinese officials argue that these restrictions disrupt global production chains and undermine international trade norms. In response, Chinese industry groups representing sectors like semiconductors and automotive manufacturing have urged Chinese companies to seek alternative suppliers for technology components. The China Semiconductor Industry Association issued a warning that U.S. chips are no longer “safe and reliable,” which could have significant financial consequences for U.S. chipmakers.
Conclusion
China’s decision to halt the export of rare minerals to the U.S. marks a major escalation in the ongoing economic and technological rivalry between the two countries. By restricting access to essential materials, China is asserting greater control over critical supply chains and retaliating against U.S. efforts to curb its technological rise. This move is likely to disrupt industries in both countries, especially those involved in semiconductors and defense technologies. As the U.S. and China continue to clash over trade and technology, the global market will face growing uncertainty and potential disruption.