Tech Wars: China's Ban on Rare Mineral Exports to the US

China has escalated its ongoing tech conflict with the United States by banning the export of critical rare earth minerals essential for semiconductor production. This development follows the US's increased restrictions on exporting advanced chips to China, a move aimed at hampering Beijing's technological and military advancements.

What Sparked the Tech War?

For months, China and the US have engaged in a tit-for-tat exchange of export restrictions, with both nations seeking to secure an upper hand in artificial intelligence, military technology, and clean energy innovations. The US aims to curtail China's ambitions while safeguarding its own national security, leading to strained diplomatic and trade relations.

The tech war's impact extends beyond geopolitics, disrupting global supply chains, inflating semiconductor prices, and forcing allied nations like Japan and the Netherlands to align with US policies.

Recent Escalations

The US triggered this week's tensions by imposing additional export bans on chip-making equipment and advanced semiconductors. These measures included sanctions on 140 Chinese companies and restrictions on high-bandwidth memory (HBM) chips critical for AI and military applications.

In retaliation, China announced a ban on exporting minerals such as gallium, germanium, and antimony to the US. These materials are vital for producing semiconductors, military equipment, and advanced electronics, underscoring their strategic significance in this tech standoff.

Why These Materials Matter

Rare earth minerals like gallium and germanium are essential for semiconductors, LED screens, electric vehicles, and next-generation technologies. China, the largest global producer of these minerals, controls 98% of gallium exports and produces 600 tonnes annually.

The US heavily relies on Chinese imports, obtaining about half its gallium and germanium from Beijing. Despite efforts to discover domestic deposits, such as recent findings in Montana, the US remains dependent on global supply chains vulnerable to geopolitical shifts.

The Global Ripple Effect

This tech war is reshaping industries worldwide. Export restrictions have caused prices for rare minerals like antimony to skyrocket, doubling to over $25,000 per tonne in 2024. Such inflation affects not only US and Chinese companies but also global manufacturers dependent on semiconductors.

Future Implications

As the incoming Trump administration takes office, experts predict even stricter US policies on chip exports and broader sanctions against China. Meanwhile, Beijing is likely to leverage its dominance in rare minerals to counter US moves, further intensifying the tech war.

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