Beijing Strikes Back Banning Critical Metal Exports to US
Beijing Strikes Back: China’s Retaliatory Move on US Export Controls
Contents:
- Beijing Strikes Back
- Key Implications: Why hasn’t anyone banned Silver?
- BOA Commodity Analysis
Authored by GoldFix,ZH Edit
China Bans Key Mineral Exports to the US
(GFN) As reported by several Legacy media agencies: In a sharp response to new export restrictions imposed by Washington, China has banned shipments of several critical minerals and metals to the US. These materials, essential for semiconductor manufacturing and military applications, include gallium, germanium, antimony, and superhard materials. Beijing also announced tighter export controls on graphite, further escalating the ongoing trade and technology conflict.
China’s commerce ministry accused the US of “weaponizing trade and technology” under the guise of national security. The new measures, effective immediately, aim to safeguard China’s national interests. This development comes in direct retaliation to US efforts to curb China’s progress in developing artificial intelligence (AI) capabilities for military use.
Chinese Trade Associations Call for Reduced US Chip Purchases
Alongside the export ban, China’s trade associations representing the semiconductor, communications, auto, and internet industries urged their members to reduce reliance on American chips. The China Semiconductor Industry Association emphasized that US chip products were “no longer safe or reliable” and advised caution in their procurement.
Impact on Key Industries and Supply Chains
The restricted minerals and metals play a pivotal role in producing semiconductors, batteries, and military hardware, including armor-piercing ammunition. Prices for germanium and gallium in Europe have already doubled due to earlier Chinese curbs, signaling the potential for significant economic disruption.
Strategic Shift in Beijing’s Approach
Experts note that China’s strategy has shifted. Previously, Beijing avoided retaliation to slow the pace of economic decoupling. Now, however, China appears to be escalating its response to impose costs on Washington. Scott Kennedy of the Center for Strategic and International Studies explained, “Holding fire simply invites greater US sanctions. They need to push back.”
President Xi Jinping’s government has made it clear that it is prepared to target Western economic interests, marking a new phase in the US-China trade conflict.
US Response and Mitigation Efforts
The US National Security Council (NSC) is currently assessing the impact of these measures and has pledged to deter Beijing’s “coercive actions.” The NSC emphasized the importance of diversifying supply chains and reducing dependence on China for critical materials.
“These controls highlight the urgency of de-risking and diversifying critical supply chains,” the NSC said. Diversification efforts have been underway, but China’s latest actions add pressure to accelerate these strategies.
The Larger Geopolitical Context
China’s retaliation comes on the heels of US restrictions introduced on Monday, which included tighter controls on semiconductor manufacturing tools and bans on advanced high-bandwidth memory (HBM) chip exports to China. These moves aim to stymie China’s progress in AI and advanced technology sectors.
Japanese chipmakers, including Tokyo Electron, Disco Corp, and Lasertec, saw a boost in stock prices as the restrictions benefited non-Chinese suppliers. Meanwhile, Washington added 136 Chinese companies, including major Apple and Samsung supplier Wingtech, to its trade blacklist for efforts to acquire foreign semiconductor technology.
A Warning Shot to Global Partners
This isn’t the first time China has used its dominance in critical materials as a geopolitical lever. Earlier this year, Beijing privately warned Japan of potential export restrictions if Tokyo supported US export controls. These tactics highlight the far-reaching implications of the escalating US-China trade war, not just for the two nations but for global supply chains.
What’s Next?
Analysts suggest China’s latest move sends a clear signal to the incoming US administration: Beijing is prepared to escalate. Wendy Cutler, a trade expert at the Asia Society Policy Institute, noted that while the immediate impact may be limited due to US supply chain diversification efforts, China could target other critical materials for export controls, which could have a more substantial effect.
Key Implications:
China's Policies on Left, US Policies on Right...
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