Critical Mineral Export Ban Highlights Escalating Trade Tensions Between U.S. and China

China has announced a ban on exports to the United States of minerals related to gallium, germanium, and antimony that could have military applications, according to a statement by its commerce ministry on Tuesday. This announcement comes a day after the United States took steps to further restrict China's access to advanced semiconductor technology. Beijing's directive, which takes immediate effect, also calls for stricter reviews of graphite shipments to the U.S. to monitor their end-use.

The export ban focuses on so-called dual-use items, which have both military and civilian applications, citing national security concerns as the primary reason. "In principle, the export of gallium, germanium, antimony, and superhard materials to the United States shall not be permitted," stated the ministry. The new restrictions are an extension of earlier limits introduced last year on critical minerals, but now apply exclusively to the U.S. and represent a significant escalation in ongoing trade tensions between the world’s two largest economies as President-elect Donald Trump prepares to take office.

Despite the ban, Chinese customs data indicates that there were no shipments of wrought and unwrought germanium or gallium to the U.S. this year through October, even though the U.S. had been among the top importers of these minerals in previous years. Gallium and germanium are critical components in semiconductor manufacturing, while germanium is also used in infrared technology, fiber optic cables, and solar cells. Additionally, China's exports of antimony products in October dropped by 97% compared to September following the implementation of export restrictions.

China's move underscores its control over global supply chains for these critical minerals. Last year, China accounted for 48% of global antimony production, which is used in applications like ammunition, infrared missiles, nuclear weapons, night vision goggles, batteries, and photovoltaic equipment. China has also accounted for 59.2% of refined germanium output and a staggering 98.8% of refined gallium production so far this year, according to consultancy Project Blue.

Jack Bedder, co-founder of Project Blue, commented, "The move is a considerable escalation of tensions in supply chains where access to raw material units is already tight in the West." This comes as supply chain access remains a significant challenge for many Western countries dependent on these critical materials.

The impact of the ban is already visible in market prices. Prices of antimony trioxide in Rotterdam have surged by 228% since the beginning of the year, reaching \$39,000 per metric ton by November 28, as reported by Argus, an information provider. One minor metals trader in Europe noted, "Everyone will dig in their backyard to find antimony. Many countries will try to find antimony deposits."

The announcement coincides with the U.S.'s latest crackdown on China's semiconductor industry, imposing restrictions on 140 companies, including chip equipment maker Naura Technology Group. This latest move comes in the context of broader economic measures proposed by President-elect Trump, who has vowed to impose tariffs of up to 60% on Chinese imports and 10% tariffs on other Chinese goods.