Chinese counterattack on the USA: ban on the export of Gallium, Germanium and Antimony and invitation not to buy US chips
China immediately retaliated against the United States following new export restrictions announced by the Biden administration on Monday, which limit a broader range of Chinese companies' access to any foreign product that includes even a single U.S.-made chip.
On Tuesday, China's Ministry of Commerce responded by announcing a ban, effective immediately, on "exports of 'dual-use products' related to gallium, germanium, antimony and superhard materials to the United States ," Reuters reported . Such “dual-use products” concern goods and technologies used for civilian or military purposes, while rare earth metals are crucial for technological production.
“In principle, the export of gallium, germanium, antimony and superhard materials to the United States will not be permitted,” the Chinese ministry said. So American chips will have to find raw materials elsewhere.
The retaliation was not unexpected. Experts had previously warned that the United States risked losing access to rare earth metals, crucial to the production of a wide range of popular products, if it imposed new trade restrictions on China. Yesterday, Chinese Foreign Ministry spokesperson Lin Jian warned at a press conference that China "will take measures to safeguard the rights and interests of its enterprises."
The problems will be especially severe for gallium and germanium, whose sources outside China are little exploited. For antimony, fortunately, stocks which have not been exploited since the end of the Second World War have long been known, but which can however be restarted.
Citing “safeguarding national security and interests,” the Chinese ministry also “requires stricter review of the end use of graphite dual-use products.” This potentially limits U.S. access to a coating material commonly used in everything from electrical cables to nuclear reactors.
Gallium, a metal that can be liquid at application temperatures above room temperature
While China's response to the latest restrictions has been swift and seemingly strong, experts believe China's response to Biden's latest round of tariffs has been relatively mild. It's possible that this week's U.S. export ban is also a response to President-elect Donald Trump's threat to raise tariffs on all Chinese products once he takes office.
Analysts have warned Monday that new export restrictions could end up hurting businesses in the United States and allied countries, potentially doing little to block China's access to U.S. technology. Four Chinese industry associations apparently added fuel to the fire threatening U.S. businesses on Tuesday, warning Chinese firms that buying U.S. chips is "no longer safe," Asia Financial reported .
These groups apparently wouldn't say how or why the chips were unsafe, but the warning could hurt U.S. chipmaking giants like Nvidia, AMD and Intel, said the financial industry publication that closely tracks the forecasts of the Chinese economy.
It was a "rare coordinated move" by industry associations that advise major companies in the telecommunications, auto, semiconductor and "digital economy" sectors, Asia Financial reported.
As tensions between the United States and China heighten ahead of Trump's next term, the tech industry has warned that any unpredictable cost increases could drive up the prices of consumer tech products . With Trump intending to add a 35% tariff on all Chinese goods, average Americans could also be hurt by the trade war, potentially paying much more for laptops, smartphones and gaming consoles.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Chinese counterattack on the USA: ban on the export of Gallium, Germanium and Antimony and invitation not to buy US chips comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/contrattacco-cinese-agli-usa-divieto-di-esportazione-di-gallio-germanio-e-antimonio-e-invito-a-non-comprare-chip-usa/ on Wed, 04 Dec 2024 07:00:46 +0000.