China bans high-tech material exports to the US – Why?

China responds to US chip sanctions by banning the export of rare earth materials to the US

The CCP’s Ministry of Commerce in China has confirmed that it has stopped exports of several rare earth materials to the US in response to sanctions. This comes after the US has imposed stricter restrictions on Chinese companies, preventing the country from accessing advanced US chipmaking technologies.

Materials affected by this ban include gallium, germanium, antimony, and some others. However, it should be noted that this is merely an expansion of existing restrictions. Previously, exporters needed special licenses to export many of these materials to the US. Similar restrictions also apply to materials like graphite products, which are important for car battery production. Now, China has changed their export restrictions to an outright ban.

The USA is highly reliant on China for many of these rare earth materials. However, other sources do exist. China’s export ban will likely increase the cost of these materials, at least in the US. Additionally, it may force/encourage other providers of these materials to increase their exports.

(Image from Aljazeera)

Aside from so-called “high-tech materials,” the new China-to-US exports ban also includes “super-hard” materials like synthetic diamonds and other synthetic materials. These materials are often used for industrial cutting tools, disc brakes, and protective coatings.

China hopes these restrictions will prevent the US from placing tighter restrictions on US tech exports and deter the incoming Trump Presidential administration from hiking tariffs on Chinese goods. As we have discussed before, Trump’s tariff plan could have a huge impact on the global economy, especially within the tech sector.

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