China tightens grip on rare earths amid trade tensions
China deploys new measures in the trade war with the USA. The introduction of export restrictions on dual-use products related to gallium, germanium, antimony, and super-hard materials may be just the beginning of a war over rare earth elements.
The Chinese Ministry of Commerce announced on Tuesday the implementation of an export ban to the USA on dual-use products related to gallium, germanium, antimony, and super-hard materials. The decision was announced a day after Washington revealed export restrictions targeting the Chinese semiconductor industry.
As Bloomberg reports, the restrictions on gallium, germanium, and antimony may be a prelude to further sanctions.
"This may only be the start of the country ensuring national security and its strategic role in mineral resources," stated Citic Securities Co.
The state-backed brokerage listed 10 commodities, including the 17 elements grouped as rare earths, in which China holds an outsized role as producer or processor. The minerals are typically crucial to high-tech manufacturing, including so-called dual uses in military applications, writes Bloomberg.
Export ban on gallium, germanium, and antimony
Furthermore, according to the announcement by Beijing authorities, the export of dual-use graphite products to the USA will undergo more rigorous reviews of the end-user and end-use starting Tuesday.
Authorities in Beijing justify this decision on grounds of "national security and (the necessity to protect) state interests and fulfilling international obligations such as non-proliferation" of specific types of weapons.
Violation of these decisions will result in criminal liability, the communiqué stated.
This is not the first decision by Beijing regarding gallium and germanium, as export restrictions on these resources, which are crucial in semiconductor production as well as the telecommunications, optical, and automotive industries, have been in place since August 1 last year.
According to the Critical Raw Materials Alliance (CRMA), China accounts for 80% of the world's gallium production and 60% of germanium.
The US responds with restrictions
Beijing's move came a day after the United States announced the third—and according to the US Department of Commerce, the "strongest"—package of restrictions limiting exports to China of equipment used to manufacture advanced semiconductors, including AI systems.
140 Chinese companies from the semiconductor sector were blacklisted, significantly hindering their business dealings with American companies. Among them are firms associated with Huawei, a leading Chinese producer of advanced semiconductors.
