U.S. - China Trade War: China's Ban on Imports of Critical Minerals Threatens U.S. Manufacturing of Chips and EVs
China's response to latest escalations shows the US is no longer in full control
As the trade war intensifies, economic interests are increasingly subservient to political ambitions.
Several days after President-elect Donald Trump vowed to impose 100 percent tariffs on the BRICS+ bloc if the Global South dares to ditch the United States dollar in cross-border trade and foreign direct investments, the Biden Administration escalated trade tensions by announcing a new round of export restrictions on as many as 140 Chinese companies that manufacture advanced memory chips and other critical chipmaking components.
Under the new Biden restrictions, Chinese companies face new restrictions, including nearly two dozen semiconductor companies, two investment companies, and over 100 chipmaking tool makers.
In response to the escalation of trade tensions by the United States, on December 3, 2024, the Chinese Commerce Ministry announced that exporting duel-use critical minerals represents a national security concern. Therefore, effective immediately, China banned exports of gallium, germanium, antimony, and other key high-tech materials to the United States.
China’s reciprocal move represents a considerable challenge for the United States and its ability to secure a continued flow of cost-effective resources for domestic production of chips, EVs, and advanced technological devices for U.S. military applications. For decades, the U.S. has been importing germanium and gallium for use in its strategic industries. Any supply disruptions could have a significant impact as the country does not have alternative routes to secure the same volumes of resources or the facilities to extract and process them domestically.
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According to the European Union study, China is the top source of more than 30 critical minerals, including germanium and gallium, globally. Exports from China account for 94 percent of gallium supply and 83 percent of germanium.
China has been the top supplier of antimony to the United States for over a decade. The volumes exported from other states, such as Belgium and Bolivia, are negligible compared to total imports from China.
Antimony is used for a variety of civilian purposes as well as for key military processes and applications, including fuel, munitions, and the production of explosives. Additionally, antimony is essential for manufacturing semiconductors.
The newly implemented export control helps China re-establish its dominance in the rare earth minerals and commodities market as well as counter Western economic sanctions and trade barriers. On the other hand, the United States is increasingly desperate as its domestic manufacturing has been on its deathbed for years and its revival is a distant and unrealistic under the current circumstances, idea.
I discuss further details on the latest escalations in trade tensions between the United States and China in my latest video:
Imagine for a moment if China decided to flip the switch off on its factories for a few days or a week: imagine the severe backlog and supply disruption that would cause. A "war" with China would be over before it even had a chance to get started. It's amazing that our "leaders" continue to press the issue of these self-defeating measures. It's hard to talk tough and be taken seriously when your own flag is manufactured in the country you want to wage war against!
The United States is a belligerent, hegemonic country and is on a mission of self-destruction.