25

On Tuesday, China announced it would halt the export of key rare minerals to the United States, marking a significant escalation in the ongoing tech war between the two superpowers. This decision follows closely on the heels of the Biden administration’s expansion of restrictions on advanced technology sales to China. The ban is part of Beijing’s broader strategy to retaliate against increasing U.S. economic pressure and to secure control over critical components needed for advanced technology and military applications.

China’s Ministry of Commerce revealed that the exports of gallium, germanium, antimony, and certain superhard materials to the U.S. would be stopped immediately. These materials, which serve both civilian and military purposes, are vital in the production of semiconductors, weapons, and other advanced technologies. Additionally, the export of graphite will face stricter scrutiny.

China’s Strategic Control Over Rare Minerals

China plays a central role in the global supply of critical minerals, which are essential for high-tech manufacturing. In response to tightening U.S. policies, China has increasingly restricted its own exports. For example, China implemented a legal framework last year to control the export of gallium and germanium, which are key materials for semiconductors. In September, the government added antimony to the list, citing its use in military explosives.

These measures follow years of escalating trade tensions, especially after the U.S. imposed tariffs and export restrictions during the Trump administration. Despite these restrictions, China has traditionally been cautious with its export policies, opting for more targeted actions, like redirecting soybean purchases to Brazil rather than the U.S. However, recent U.S. moves to restrict Chinese access to critical technologies appear to have prompted China to take a stronger stance.

China’s actions are reminiscent of the 2010 embargo on rare earth metals exports to Japan, which led to significant disruptions in Japanese manufacturing. While the U.S. may be better positioned than Japan due to alternative supply sources, the Chinese ban still poses significant risks to American industries reliant on these critical materials.

Implications for U.S. Defense and Technology Sectors

The ban on exports of superhard materials is especially concerning for the U.S. defense sector. Tungsten, an essential material for making armor-piercing ammunition, is one of the minerals affected. The U.S. has been working to develop alternative sources for tungsten, but this process will take several years to fully implement.

In addition, the supply of antimony, which China has already been restricting, has caused global prices to double in recent months. According to the U.S. Geological Survey, China supplies over 50% of the germanium used in the U.S., a material critical for infrared technology and fiber optics. The U.S. also depends on China for 21% of its gallium imports, a key component in semiconductor production. Since the U.S. hasn’t mined gallium domestically since 1987, this ban poses a challenge to American semiconductor manufacturers, who may need to seek new suppliers.

Growing Tensions and Retaliatory Measures

The rare mineral export ban is just the latest in a series of retaliatory actions taken by China in response to U.S. technology restrictions. On Monday, the Biden administration imposed new curbs, prohibiting the sale of certain chips and machinery to China. The U.S. also added more than 100 Chinese companies to a restricted trade list. These actions are part of a broader strategy to prevent China from advancing in high-tech fields like semiconductor production, artificial intelligence, and telecommunications.

Former President Donald Trump has also promised to implement even stricter policies if he returns to office, including significant tariffs and the potential removal of permanent normal trade relations with China. Such measures would further restrict trade and escalate tensions between the two nations.

China has sharply criticized these U.S. technology curbs, calling them “illegal” and harmful to global trade stability. Lin Jian, a spokesperson for China’s Ministry of Foreign Affairs, argued that these practices disrupt global production chains and undermine international trade norms.

In response to the U.S. restrictions, Chinese industry groups have urged Chinese companies to seek alternative suppliers for semiconductors and other technology components. The China Semiconductor Industry Association issued a statement advising caution when purchasing American chips, warning that U.S. products are no longer “safe and reliable.” This could hurt U.S. chip manufacturers, such as Micron and Intel, who have already faced investigations by Chinese authorities.

Conclusion

China’s decision to ban rare mineral exports to the U.S. signals the growing economic and technological conflict between the two countries. This move is part of a broader strategy by China to assert control over critical global supply chains, particularly in the technology and defense sectors. With both nations tightening their economic and technological policies, the global market faces growing uncertainty. As the U.S. and China continue their trade war, the impacts on industries dependent on these materials—especially semiconductors and defense technologies—could be far-reaching.