December 3, 2024
China escalated its trade dispute with the United States by imposing a ban on exports of several critical materials with high-tech and military applications, including gallium, germanium, antimony, and superhard materials. This retaliatory move comes in response to new technology restrictions imposed by the Biden administration aimed at curbing China’s advancements in semiconductors and artificial intelligence.
The Chinese Ministry of Commerce announced on Tuesday that these materials are now barred from being shipped to the US. Additionally, Beijing has implemented tighter controls on graphite exports, further straining supply chains for essential components used in technology and defense industries.
This decision follows the White House’s announcement of fresh curbs on high-bandwidth memory chip sales by US and foreign companies to China. The US restrictions are part of a broader strategy to slow China’s progress in developing advanced technologies that could enhance its military capabilities.
China had already placed stricter oversight on gallium and germanium exports last year, disrupting global trade and sending prices soaring. Reports indicate that US industries have not imported these metals from China this year, relying instead on existing inventories or sourcing them from alternative suppliers. Companies such as Globalwafers Co., Lumentum Holdings Inc., and Coherent Corp. previously expressed confidence in their ability to manage supply chain disruptions through stockpiles and other sources.
At a meeting on Tuesday with the National Committee on American Foreign Policy, Chinese Foreign Minister Wang Yi criticized the US for its “illegal” and unilateral sanctions. He urged the US to take steps to stabilize bilateral relations and expressed hope that future interactions would pave the way for improved ties.
“We urge the US side to take actions that promote stability in the bilateral relationship and hope the new administration adopts a positive approach in the next four years,” Wang said.
China’s dominance as the world’s leading supplier of critical minerals has increasingly alarmed Washington, particularly after Beijing imposed export controls on gallium and germanium last year. In response, U.S. manufacturers have sought alternative supply chains, miners have accelerated efforts to develop new deposits, and lawmakers have pushed to bolster national strategic reserves.
The targeted metals—essential for manufacturing semiconductors, satellites, and night-vision goggles—highlight the strategic implications of China’s actions. According to a recent U.S. Geological Survey report, a complete export ban on gallium and germanium could inflict a $3.4 billion economic loss on the U.S.
“Export bans on critical minerals have been anticipated for some time and serve as a warning,” said Joe Mazur, a senior analyst at Trivium China. “China is signaling its readiness to respond more aggressively to U.S. economic pressure than it has in recent years.”
The latest U.S. measures, announced Monday, added 140 Chinese entities to a blacklist for allegedly advancing Beijing’s interests, particularly in producing chip-manufacturing equipment critical to China’s drive for semiconductor self-sufficiency.
Meanwhile, Chinese industry groups representing the internet, semiconductor, and automotive sectors issued a call on Tuesday, urging Chinese companies to exercise caution when purchasing U.S. chips. This move underscores Beijing’s broader push for technological independence amid escalating trade tensions.