The Chinese government, on the 3rd of December 2024, announced that it has banned the exports of various critical minerals that are some of the main components needed for the production of semiconductors leading to a rise in the trade escalation before the newly elected US President Donald Trump takes over the office in January. The government has cited the curb as a step taken towards the “national security” of the country. This article brings you all the details about the curbs along with the possible reasons as to why exactly China banned exports to the US.
China Bans Exports To US: Bans On Germanium And Gallium
According to the official statement by the Chinese ministry, China has decided to restrict the export of relevant dual-use items to the US in order to fulfill international obligations like non-proliferation. The items that have been banned are critical minerals like Gallium, Germanium, and Antimony which are some of the main components needed for the production of semiconductors and bullets. Graphite is another critical mineral, used in the production of semiconductors, that will be facing stricter reviews about the end-users and end-uses.
China Bans Exports To US: Possible Reason Behind The Curbs
According to the Chinese government, the curbs are active steps towards ensuring national security and restricting the export of critical minerals. However, the real reason for the curbs seems to be something entirely different. This Monday, the American government announced restrictions on sales to a total of 140 Chinese companies in order to restrict the export of state-of-the-art chips to the Chinese that are used as one of the key components in the production of advanced AI and weapons systems. China, as a reaction to the curbs imposed on it, stated that America had been actively politicizing and weaponizing trade and technological issues. Hence, The restrictions imposed by China on America can be considered a retaliatory action.
China Bans Exports To US: Trade Disruptions
After the escalation of Trade tensions between the two biggest economies of the world, trade disruptions are bound to happen. Both countries have been applying strict restrictions on each other that may result in disruption of supply chains as many producers have been hoarding stock of the banned materials for future use. China is one of the major producers of Gallium and Germanium, and according to the customs data, there have been no shipments whatsoever of both these minerals to the United States of America through the month of October 2024 when the latter was one of the largest market for these minerals the previous year. The US chip market in China has also been severely affected after the curb and the industry has started looking for alternative sources.
China Bans Exports To US: Reaction From United States
The United States of America has been assessing the new curbs and mentioned that they will be taking necessary steps that will be required as a response to the restrictions. One of the spokesmen from the White House explained how the restrictions only highlight the need for collective efforts in the direction of diversifying and de-risking supply chains that are critical away from China.
