In a dramatic escalation of the ongoing tech trade war between China and the United States, Beijing announced an immediate ban on exports of rare earth metals and materials crucial for semiconductor manufacturing.
China's Ministry of Commerce declared on Tuesday that it would halt sales of gallium, germanium, antimony and superhard materials to the US, citing national security concerns over their dual military and civilian applications. The ministry also announced stricter controls on graphite exports.
The move comes as a direct response to the Biden administration's latest restrictions on China's access to advanced US semiconductor technology. The new US policy prevents Chinese businesses from accessing stolen trade secrets containing American-made chips.
The export ban highlights China's dominant position in the global supply chain for these critical materials. China currently produces nearly all of the world's supply of these rare earth elements, which are essential components in manufacturing semiconductors, weapons systems, and other advanced technologies.
Industry experts warn this retaliatory measure could severely impact US technology manufacturers who rely heavily on Chinese supplies. Four major Chinese industry associations have already cautioned their members about the risks of purchasing US chips, potentially affecting major American chipmakers.
The timing of China's response also appears connected to anticipated policy changes under the incoming Trump administration. With President-elect Trump promising to impose new tariffs on Chinese goods, Beijing's aggressive stance may signal its readiness for increased economic confrontation.
The escalating trade tensions between the world's two largest economies are expected to affect consumer markets. Industry analysts predict possible price increases for common electronic devices like smartphones, laptops, and gaming consoles as manufacturing costs rise due to supply chain disruptions.
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