(Bloomberg) — China ratcheted up trade tensions with the US with a ban on several materials with high-tech and military applications, in a tit-for-tat move after President Joe Biden’s government escalated technology curbs on Beijing.
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Gallium, germanium, antimony and superhard materials are no longer allowed to be shipped to America, the Ministry of Commerce said in a statement Tuesday. Beijing will also place tighter controls on sales of graphite, it added.
The move came after the White House on Monday slapped fresh curbs on the sale of high-bandwidth memory chips made by US and foreign companies to China. The Biden administration’s goal, building on years of evolving trade restrictions, is to slow China’s development of advanced semiconductors and artificial intelligence systems that may help its military.
President Xi Jinping’s government initially placed gallium and germanium under stricter government oversight last year, in a move that sent prices spiking and upended trade flows. There were zero reported exports of the metals to the US this year, which suggests that American industries were instead drawing on inventories or procuring the metal from other sources.
Following the global restrictions that China imposed on the two metals last year, several buyers of the materials — including Globalwafers Co, Lumentum Holdings Inc, and Coherent Corp — said they didn’t expect near-term disruptions because the industry had ample inventories to fall back on, and alternative sources of supply could be found.
The nation is opposed to the outgoing US administration broadening its “illegal” unilateral sanctions, Foreign Minister Wang Yi said Tuesday at a meeting with visiting delegates from the National Committee on American Foreign Policy.
“We urge the US side to do more things that would help stabilize the bilateral relationship, and hope that the new administration will take a good first step in China-US interactions in the next four years,” he said.
China is the top global supplier of dozens of critical minerals, and concerns about its dominance have been growing in Washington since the country placed initial controls on exports on gallium and germanium last year. That prompted US manufacturers to seek alternative supplies, while miners raced to tap new deposits and politicians sought to replenish national strategic reserves.
The Asian nation’s response targets metals used in everything from semiconductors to satellites and night-vision goggles.
