China has banned the export of “dual-use items” related to gallium, germanium, antimony and carbide materials to the United States. The Chinese government has announced that it will suspend exports to the United States of several key materials used in advanced semiconductors and military technology. Additionally, China is reportedly considering banning the export of graphite. The move comes just a day after the Biden-Harris administration imposed sweeping restrictions on sales of advanced semiconductors to China. This is not the first time China has restricted exports to the United States and its allies. For example, in 2010, China imposed a two-month embargo on rare earth metal exports to Japan during a territorial dispute between the two countries. China is a major supplier of critical minerals used in the production of advanced technologies such as semiconductors, controlling much of the world’s supply.
Over the past year, China introduced a legal framework to restrict exports of gallium and germanium, essential materials for semiconductors, and in September expanded this to include antimony, a metal used in military explosives. Additionally, starting in October, China required exporters of rare earth metals to disclose how these materials are used in Western supply chains. A year ago, China suspended exports of gallium and germanium until it established a system to approve the trade. This has forced the United States to rely more on semi-finished materials purchased from other countries, such as Japan, which sources directly from China.
China’s export ban also includes superhard materials such as diamond and synthetic compounds, which are known for their extreme density and incompressibility. These materials are used in industries such as cutting tools, disc brakes, and protective coatings. The ban is likely to include tungsten, an essential material in the production of armor-piercing ammunition. London-based company Guardian Metal Resources plans to begin mining tungsten in Nevada, but the mine is expected to take nearly three years to establish. Meanwhile, the Biden-Harris administration has imposed a 25% tariff on tungsten imports from China to encourage U.S. manufacturers to seek more stable sources.
China currently supplies 54% of the United States’ demand for germanium, a key component in infrared technology and fiber optics, according to the U.S. Geological Survey. Gallium, which is used in semiconductors, has not been mined in the United States since 1987. As a result, the United States imports gallium from Japan (26%), China (21%), Germany (19%), and other small supplier countries. The United States has domestic deposits of these minerals, but they are not mined in large quantities, although several projects are currently exploring ways to extract them. For example, researchers are working to extract valuable elements from old coal mines in West Virginia and lignite mines in North Dakota. Additionally, Perpetua Resources is developing an antimony mine in Idaho with support from the U.S. government, which awarded the company a $510,500 grant from the Department of Defense. Currently, China, Russia and Tajikistan control 90% of the world’s antimony supplies.
Antimony is commonly referred to as the “loneliest element” because it is almost exclusively produced as a byproduct with other minerals. Mineral mines often produce in this way, meaning that the more mining takes place in a country, the more secondary minerals will be produced.
Export restrictions have had a disparate impact on the prices of these important minerals, with antimony prices more than doubling in a year to more than $25,000 per tonne. The prices of gallium, germanium and graphite have also mostly increased.
The Biden-Harris administration recently expanded technology restrictions on China, including banning the sale of certain types of chips and machinery and adding 140 Chinese companies to a trade restriction list. The restrictions were a routine step to update existing curbs and close loopholes that some businesses had used to circumvent the restrictions, Biden-Harris administration officials said.
This is the third major move in the past three years by the Biden-Harris administration to try to prevent China from catching up with the United States in developing advanced chips for military equipment and artificial intelligence. The Biden administration will help U.S. automakers and prevent China from capturing data from China’s EV operating systems by curbing U.S. investment in certain Chinese industries or blocking Chinese electric vehicles. China has steadily expanded other restrictions on trade with China, including
President-elect Trump also promised aggressive steps to further reduce trade with China or force China to operate on a more level playing field. He has advocated imposing tariffs of more than 60% on Chinese goods, abolishing so-called permanent normal trade relations with China, and increasing tariffs on Chinese goods as a result.
conclusion
China controls the production and processing of critical minerals essential for “green” and military technologies, and recently banned exports of gallium, germanium, antimony, and superhard materials to the United States. The Chinese government controls the supply chain for critical minerals and rare earths through subsidies, slave labor, and purchases of ore from Africa and Latin America. By making it harder to mine these minerals in the United States and mandating the use of “green” technologies, the Biden-Harris administration is helping China expand its market power. The United States needs to promote and implement policies to reduce dependence on the Chinese economy, which President-elect Trump has campaigned on.
