China has officially announced a ban on exports to the United States of several critical high-tech materials, including gallium, germanium, and antimony. This decision is part of China's response to the U.S. government's expanded list of Chinese companies facing restrictions on semiconductor-related exports. The move comes amid escalating trade tensions, particularly as President-elect Donald Trump has threatened to increase tariffs on Chinese imports significantly.
The Chinese Commerce Ministry cited the U.S. actions as a malicious attempt to suppress China’s technological advancement, expressing strong disapproval of the U.S. national security claims that underpin the export restrictions. A spokesperson for China's Foreign Ministry emphasized the country's opposition to these unilateral sanctions and the broad interpretation of national security by the U.S., alleging that such measures adversely impact Chinese companies and the global market.
These restricted minerals are essential for various products, including computer chips, batteries, and potentially military applications. In July 2023, China announced that exporters would need licenses to ship these strategically important materials, while further restrictions on antimony and graphite were implemented in August. Antimony is particularly crucial for a range of industries, from electronics to flame retardants and military equipment.
China is the leading global producer of gallium and germanium, which are vital for manufacturing components in consumer electronics, automotive products, solar panels, and defense technologies. The latest restrictions also cover super-hard materials, including synthetic diamonds, which have a wide array of industrial applications. China's Ministry of Commerce argued that its actions are necessary to safeguard its rights in light of U.S. trade practices.
Frustrations from the Chinese government regarding U.S. technological curbs have been evident, but retaliation has been measured to avoid hindering China's own technology developers. Several industry associations in China have protested the U.S. export limitations, highlighting the adverse effects on supply chains and market stability. The China Association of Automobile Manufacturers criticized the use of national security as justification for such export controls, claiming it undermines fair competition and disrupts the global industrial chain.
The China Semiconductor Industry Association echoed these sentiments, warning that these restrictions could affect the reliability of U.S. chip products, prompting caution among Chinese buyers. Notably, the U.S. relies heavily on China for its supply of gallium and germanium, sourcing approximately half of its needs directly from China. In 2022, China exported around 23 metric tons of gallium and produces about 600 metric tons of germanium annually.
Despite having deposits of these minerals, the U.S. has not engaged in extensive mining, although some exploratory projects are underway. The announcement of these export restrictions has led to price fluctuations for these critical materials, with antimony prices more than doubling this year, and increases in prices for gallium, germanium, and graphite noted as well. Overall, the situation reflects a tense interplay of trade and technology between the two global powers.
