On December 3 China imposed a ban on exporting some very crucial “dual-use” minerals to the United States of America. Beijing decided to halt the export of the minerals- Gallium, Germanium and Antimony that have widespread military uses, escalating trade tensions the day after Washington’s latest crackdown on China’s chip sector.
The ban possesses the ability to hamper many sectors like defence and technology, and global supply chains across the globe. There might be production delays and prices would rise as these minerals are very important for the survival of markets.
The Trade War between US and China
US and China make up two of the biggest economies of the world. Tariffs, restrictions, and bans have been associated with China and the United States’ chaotic trade war. Both economic powerhouses have been involved in a series of tit-for-tat activities, affecting a diverse range of industries and global markets. The debate, which is primarily driven by disagreements over intellectual property, technological dominance, and trade imbalances, has severely strained diplomatic ties and had far-reaching consequences for the global economy. The current trade war continues to affect the vast canvas of international commerce and economics, painting it with questions about the future direction of this ever increasing and exasperating disagreement.
Why the abrupt ban?
The bold move followed the US’s actions of curbing China’s semiconductor magnanimity by imposing export controls on the latter’s industry in the wake of national security concerns.
This ban on minerals by China strengthens its already existing monopoly on these minerals and semiconductor market. It controls the humungous 94% of gallium’s and 83% of germanium’s global supply which is why this ban would be very impactful.
Substantial minerals involved and the significance they hold
Gallium: A vital component in the gigantic technology industry, gallium is used in solar panels and semiconductors. China is a major participant in the global supply chain as it produces most of the world’s gallium.
Germanium: It is a crucial element for semiconductors as well as fiber and infrared optics. 83% of the world’s output of germanium comes from China.
Antimony: Whilst not as widespread in technology, antimony is a prerequisite for industrial and military applications. It is critical to the manufacturing of flame retardants and batteries.
The above-mentioned minerals are also referred to as “dual-use items” i.e. they have not only military but also civilian uses. China is trying to prevent these minerals from being diverted to military applications by limiting their exports. The wider national security goals of the economic giant is evident from this policy.
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In a nutshell
China banned the sale of several vital “dual-use” minerals to the United States to retaliate Washington’s most recent attack on China’s chip industry. Beijing decided to stop exporting the minerals, gallium, germanium, and antimony, which have many military applications. This decision escalated the already existing trade tensions between the economic follies.
The skirmish has the potential to disrupt global supply lines as well as a number of industries, including technology and defence. Since these minerals are crucial to the sustainability of markets, there may be production delays and price hikes.
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