China bans export of critical minerals to US as trade tensions escalate
By Amy Lv and Tony Munroe
(Reuters) - China on Tuesday banned exports to the United States of the critical minerals gallium, germanium and antimony that have widespread military applications, escalating trade tensions the day after Washington's latest crackdown on China's chip sector.
The curbs strengthen enforcement of existing limits on critical minerals exports that Beijing began rolling out last year, but apply only to the U.S. market, in the latest escalation of trade tensions between the world's two largest economies ahead of President-elect Donald Trump taking office next month.
A Chinese Commerce Ministry directive on dual-use items with both military and civilian applications cited national security concerns. The order, which takes immediate effect, also requires stricter review of end-usage for graphite items shipped to the U.S.
"In principle, the export of gallium, germanium, antimony, and superhard materials to the United States shall not be permitted," the ministry said.
Gallium and germanium are used in semiconductors, while germanium is also used in infrared technology, fibre optic cables and solar cells. Antimony is used in bullets and other weaponry, while graphite is the largest component by volume of electric vehicle batteries.
The move has sparked fresh concern that Beijing could next target other critical minerals, including those with even broader usage such as nickel or cobalt.
"China has been signalling for some time that it's willing to take these steps, so when is the U.S. going to learn its lesson?" said Todd Malan of Talon Metals, which is trying to develop a nickel mine in Minnesota and is exploring for the metal in Michigan. The only U.S. nickel mine will be depleted by 2028.
The United States was assessing the new restrictions, but will take "necessary steps" in response, a White House spokesperson said, without giving details.
"These new controls only underscore the importance of strengthening our efforts with other countries to de-risk and diversify critical supply chains away from PRC (China)," the spokesperson said.
Representatives for Trump did not immediately respond to a request for comment.
Chinese customs data show there have been no shipments of wrought and unwrought germanium or gallium to the U.S. this year through October, although it was the fourth and fifth-largest market for the minerals, respectively, a year earlier.
Similarly, China's overall October shipments of antimony products plunged by 97% from September after Beijing's move to limit its exports took effect.