China has announced a ban on the export of critical materials such as gallium, germanium, and antimony, which are essential for manufacturing semiconductors, electric vehicles, and other technological products.
This move comes in response to the recent expansion of U.S. export controls, which now include over 140 Chinese companies, aiming to restrict China’s access to advanced technologies.
Both nations justify their trade controls as necessary for national security while accusing each other of “weaponizing” commerce.
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Consequences
Experts predict that these restrictions could have a major impact on manufacturing across various industries and global supply chains. According to a study by the U.S. Geological Survey, disruptions caused by these measures could cost the U.S. economy more than $3 billion.
The export ban also includes graphite, a material used in electric vehicle batteries and energy storage.
China dominates the production and refining of these materials, giving it a significant cost advantage over other suppliers.
The tension between the world’s two largest economies could escalate further, particularly with the arrival of the new U.S. president, who has pledged to increase tariffs on Chinese-made products.
The Biden administration has been promoting a “Mineral Security Partnership” with the European Union and other countries to reduce dependence on China for these critical materials. Efforts are also underway to exploit domestic deposits of rare earth elements and other vital materials within the United States.
China, in turn, has announced that the export restrictions will apply globally, threatening legal sanctions against violators.
