China Dials Up US Trade Tension With Tit-for-Tat Metals Ban

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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.

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 is to slow China’s development of advanced semiconductors and artificial intelligence systems that may help its military.

The targeted metals are used in everything from semiconductors to satellites and night-vision goggles. China is the top global supplier of dozens of critical minerals, and concerns about its dominance have been mounting in Washington since the country placed initial controls on exports of gallium and germanium last year. That move sent prices spiking and upended trade flows as manufacturers sought alternative supplies, while miners moved to tap new deposits and politicians sought to replenish national strategic reserves.

Several buyers of the materials — including Globalwafers Co, Lumentum Holdings Inc, and Coherent Corp — said at the time 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.

And Chinese customs data shows zero reported exports of gallium and germanium to the US this year, which suggests that American industries were instead drawing on inventories or procuring the metal from other sources.

However, prices for both metals have surged since the restrictions were announced last year — gallium has risen 80%, while germanium has more than doubled.

A White House spokesperson said that the US was still assessing the new restrictions and looking for ways to mitigate their impact, while adding that China’s move highlighted the need to diversify critical supply chains. The Commerce Department’s Bureau of Industry and Security declined to comment.

China 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.

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