China Escalates Tech War by Banning Critical Mineral Exports to the U.S.
China has intensified its ongoing tech standoff with the United States by announcing a ban on the export of key rare earth minerals essential for semiconductor production. The move comes just a day after the U.S. imposed stricter export restrictions on advanced chip technologies bound for China, escalating tensions in a high-stakes technological rivalry.
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Why Is There a Tech War Between the U.S. and China?
The U.S. and China have been locked in a tit-for-tat exchange of export restrictions for months. Washington’s objective is to curb China’s advancements in military technology, artificial intelligence (AI), and clean energy, aiming to prevent Beijing from becoming a global leader in critical technologies.
This tech battle has disrupted global supply chains for semiconductors, driving up prices and impacting industries worldwide. U.S.-China relations have hit a historic low under President Joe Biden due to disputes over technology, human rights, and China’s military activities, including its aggressive maneuvers in the South China Sea.
Adding to the tension, President-elect Donald Trump has vowed to impose even stricter sanctions and a steep 60% tariff on Chinese imports when he assumes office.
What Sparked the Latest Escalation?
On Monday, the U.S. announced sweeping export restrictions, targeting China’s access to chip-making equipment and advanced semiconductor technologies. The new rules include bans on high-bandwidth memory (HBM) chips, vital for AI applications, and restrictions on 140 Chinese companies, including firms linked to Huawei and other major tech players.
Washington stated that the measures are necessary to protect national security, with U.S. National Security Adviser Jake Sullivan emphasizing the need to safeguard critical technologies.
China retaliated swiftly. On Tuesday, it banned the export of key minerals like gallium, germanium, and antimony to the U.S., all of which are critical for semiconductor manufacturing, military applications, and industrial use. These actions build on earlier restrictions, such as tightened controls on graphite products and synthetic industrial materials.
China’s Ministry of Commerce justified the move, citing U.S. “abuse” of export controls and “malicious suppression” of Chinese technological progress.
A woman works at a semiconductor chip factory in Binzhou in eastern China’s Shandong province on June 4, 2024 [AFP]
The Global Impact of the Tech War
The materials now under export bans are essential for producing advanced technologies, including AI systems, electric vehicles, and military equipment. Gallium, for instance, is critical for LED screens, solar cells, and next-generation weapons, while antimony is used in batteries and artillery shells.
China, which dominates global production of these materials, is the primary supplier to the U.S., controlling 98% of gallium exports. The U.S. has been unable to produce gallium domestically for years and relies heavily on imports from China and Taiwan.
Taiwan, a significant player in the semiconductor industry, produces over 60% of the world’s advanced chips. Its geopolitical importance adds another layer of complexity to U.S.-China tensions, as Beijing claims sovereignty over the self-governing island.
What Lies Ahead?
With the incoming Trump administration promising even harsher measures against China, the tech rivalry is poised to deepen. However, the consequences may extend far beyond the two superpowers. Global industries reliant on semiconductors and rare earth materials face rising costs and supply chain disruptions, with prices of minerals like antimony and gallium already surging.
The escalating tech war not only underscores the strategic importance of advanced technologies but also raises questions about the stability of global economic and industrial systems. As the U.S. and China double down on their efforts, the world watches closely, bracing for the broader implications of this high-stakes competition.
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