China Bans Export of Key Minerals to U.S., Escalating Trade Tensions

China’s Ministry of Commerce has imposed a ban on exporting critical minerals—gallium, germanium, and antimony—to the United States, citing national security concerns. The move, effective immediately, targets materials with dual-use applications in military and civilian sectors, further intensifying trade frictions between the world’s two largest economies.

Key Details of the Export Ban

1. Minerals Impacted
   • Gallium and germanium are essential for semiconductors, infrared technology, fiber optics, and solar cells.
   • Antimony has applications in ammunition, infrared-guided missiles, nuclear weapons, batteries, and night vision technology.
2. Stricter Reviews on Graphite
   Exports of graphite items to the U.S. will now undergo enhanced scrutiny to ensure compliance with end-use restrictions.
3. Production and Market Implications
   • China dominates global production, contributing 98.8% of refined gallium, 59.2% of refined germanium, and 48% of globally mined antimony in 2023.
   • The announcement has already caused a significant spike in antimony trioxide prices, surging by 228% this year to $39,000 per metric ton.

Strategic Context

• U.S. Semiconductor Restrictions
  The ban follows Washington’s recent curbs on exports to China’s semiconductor industry, targeting 140 companies, including chip equipment maker Naura Technology Group.
• National Security Framing
  Both nations frame their actions as necessary for national security. China’s export restrictions align with prior measures to limit critical mineral access, a vital component of advanced technology and defense.
• Economic Impacts
  Supply chains in the West, already under strain, face further disruption. “This is a considerable escalation of tensions in supply chains where access to raw materials is tight,” said Jack Bedder, co-founder of consultancy Project Blue.

Broader Trade Tensions

China’s move occurs amid increasing tensions as the U.S. enacts policies to limit China’s access to advanced technologies. The export ban coincides with President-elect Donald Trump’s plans for aggressive tariffs on Chinese goods, potentially signaling another round of trade wars akin to his previous administration.

Global Reaction and Outlook

• Market Adjustments
  Western countries may intensify efforts to discover alternative sources for these minerals, with exploratory projects expected to increase globally.
• Strategic Risks
  The restriction underscores growing economic decoupling, with potential ramifications for global industries reliant on these materials.
• Future Negotiations
  Both nations are expected to leverage these policies as bargaining tools in upcoming trade negotiations.