On Tuesday, China announced a ban on the export of several critical minerals to the United States, intensifying the ongoing technological and trade conflict between the two superpowers. This move came just a day after the Biden administration imposed further restrictions on American technology sales to China. The ban includes key minerals such as gallium, germanium, antimony, and certain superhard materials, which are essential for producing semiconductors, advanced technology, and military equipment.
Strategic Retaliation: China Tightens Control Over Rare Earth Exports
China has long held a dominant position in global supply chains, particularly in rare earth minerals essential for high-tech industries. The export ban is seen as part of China’s broader strategy to assert control over these critical resources. Over the past year, China has gradually tightened its grip on key minerals. For instance, gallium and germanium—critical for semiconductor production—have faced new export regulations. Antimony, used in military explosives, was added to the restricted list in September. Additionally, China has imposed stricter reporting requirements for exporters of rare earth metals, which are vital for technologies like smartphones and smart bombs.
This escalation follows a series of actions from the U.S. aimed at limiting China’s technological advancements. China’s decision to restrict exports is widely viewed as retaliation against these U.S. policies, signaling Beijing’s willingness to use supply chains as a weapon in the ongoing tech war.
Impact on U.S. Technology and National Security
The ban on superhard minerals, particularly tungsten, has raised alarms in the U.S., where tungsten is crucial for manufacturing armor-piercing ammunition and other military technologies. While the U.S. is working to find alternative sources, it could take years to develop new domestic mining operations. This restriction could significantly impact U.S. defense capabilities.
Additionally, the ban on antimony has already led to a sharp rise in global prices for this material, which is also vital for military uses. According to the U.S. Geological Survey, China supplies more than half of the germanium used in the U.S., a critical component for infrared technology and fiber optics. The U.S. also depends on China for a significant portion of its gallium imports, which is used in semiconductors. As the U.S. no longer mines gallium domestically, this export ban poses a serious challenge to the semiconductor industry.
U.S. Expands Restrictions, Further Escalating Tensions
China’s export ban is part of a broader response to U.S. actions, particularly the recent expansion of restrictions on technology sales to China. The Biden administration has added over 100 Chinese companies to its restricted trade list and further limited the sale of specific chips and machinery to China. These measures are aimed at curbing China’s access to cutting-edge technologies, such as artificial intelligence, telecommunications, and semiconductor production.
In response, China has condemned the U.S. measures, calling them “illegal” and damaging to global trade stability. Chinese officials argue that these restrictions undermine international trade norms and disrupt global supply chains. Industry groups in China have also urged domestic companies to source alternative suppliers for technology components, particularly semiconductors. The China Semiconductor Industry Association has cautioned that American-made chips are no longer “safe and reliable,” a statement that could have significant financial consequences for U.S. chip manufacturers.
Global Ramifications and Long-Term Consequences
The export ban on rare minerals could have long-lasting effects on both the U.S. and global markets. With China controlling a significant portion of the supply of these critical materials, the U.S. will face increased challenges in securing the resources needed for its defense and technology industries. The global supply chain for semiconductors, in particular, could be disrupted, leading to shortages and rising costs.
This trade conflict, marked by China’s use of export restrictions and the U.S. imposition of technology curbs, highlights the growing tensions between the two largest economies in the world. As the rivalry continues to intensify, industries in both countries—and around the globe—must brace for potential disruptions and economic fallout. The impact of these trade wars will likely be felt for years to come, reshaping the global landscape for technology and supply chains.