President Trump had suggested imposing an additional 10% import duty on Chinese goods. However, in a surprising move, China has delivered a significant blow to the US. The world’s second-largest economy has halted the export of certain rare minerals. These elements are used in products like smartphones, electric cars, radars, and CT scanners. This decision from China comes after the US imposed sanctions on Chinese companies.
Moreover, this step by China is seen as a direct challenge to newly elected President Donald Trump. Trump had advocated for an extra 10% tariff on Chinese imports. It's conjectured that as Trump assumes office, the tension between these global powers may intensify.
What Restrictions Has China Imposed?
China has banned the export of three major rare minerals: gallium, germanium, and antimony. Gallium (atomic number 31) is a soft, silvery-white metal akin to aluminum and has a melting point slightly above room temperature. Germanium (atomic number 32) is a gray-white, brittle metal (a metalloid) and antimony (atomic number 51) is a hard, brittle, and silvery material.
Why Are These Metals Crucial?
In today’s age, these metals are considered essential in the US. They're used in defense and technology products, holding a significant position globally. Gallium, germanium, and antimony are mainly utilized in computing, defense, and renewable energy technologies. They are also essential in creating semiconductors, among other benefits.
China: The Leading Exporter
An AP report suggests China is the major source and refiner of these metals, crucial for both consumer goods and military objectives. These materials fall under Chinese export control and are part of the 50 minerals identified as 'critical' by the United States Geological Survey.
Potential Economic Impact: Over $3 Billion Loss
A recent USGS study estimated disruptions in the supply of gallium and germanium alone could cost the US economy over $3 billion. The situation remains complex, as China imposed licensing requirements on exporting these metals in July 2023. According to Chinese customs data, there have been no exports to the US this year. Antimony exports have also plummeted.
What Will Trump Do?
Since President Trump initiated the trade war with Beijing, tensions have escalated. China has cautiously approached in response to US limits on access to advanced technologies. It will be intriguing to see if Trump intensifies tariffs on China after taking office. However, some experts doubt that an escalation in tariffs is likely.
