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British media: The United States is walking a tightrope, the only question is which element on the periodic table will be next
[Text/Observer Network Qi Qian] China introduced export controls on relevant dual-use items to the United States earlier this month, which attracted global attention and related discussions continue to this day.
Reuters reported on December 18 that China dominates the supply chain of key minerals. In this context, the United States's continued suppression of China's high-tech industry is clearly "walking a tightrope": on the one hand, it wants to use tariffs to reduce its dependence on China; on the other hand, it tries to avoid comprehensive retaliation from China before building alternative production capacity.
The report said that at present, critical minerals will become China's "weapon of choice" in dealing with the escalating trade dispute with the United States. "The only question is which critical metal in the periodic table China chooses next."
On December 3, China's Ministry of Commerce issued an announcement, announcing strict controls on the export of gallium, germanium, antimony, superhard materials, graphite, and other dual-use items to the United States.
The announcement requires that dual-use items be prohibited from being exported to U.S. military users or for military purposes; in principle, the export of dual-use items such as gallium, germanium, antimony, and superhard materials to the U.S. will not be permitted; and a stricter review of end-users and end-uses will be implemented for the export of dual-use graphite items to the U.S. The announcement also emphasizes that any organization or individual in any country or region that violates relevant regulations will be held accountable according to law.
Reuters said that China's move was a swift response to the United States' new round of chip export ban on China.
"This is a carefully planned escalation," the report said, "in which China uses its dominant position in key metals to retaliate against the US attack on its high-tech capabilities."
According to data from the United States Geological Survey, last year, the United States relied 100% on imports for gallium, with China accounting for 21% of its imports; the United States relied on imports of antimony at 82%, and more than 50% of germanium, with China accounting for 63% and 26% of its imports, respectively. The United States Geological Survey warned that China's total ban on gallium and germanium exports could cause direct losses of $3.4 billion to the U.S. economy and trigger a chain effect of disrupted supply chain operations.
Govini, a U.S. defense intelligence company, recently released a report saying that China's export ban on key U.S. minerals will affect the weapons production of all branches of the U.S. military, involving more than 1,000 weapon systems and over 20,000 parts.
In addition, China's latest ban also "severely affected" the supply chain of gallium, germanium, and antimony. Bloomberg noted that China has set a precedent in prohibiting foreign companies from selling products to the United States. Before this, "extraterritoriality" in sanctions control seemed to have always been the privilege of the United States and Western countries.
After China announced new export restrictions, the global price of antimony soared from $13,000 per ton at the beginning of the year to $38,000. The price of germanium soared from $1,650 to $2,862 during the same period.
Reuters believes that the United States is "walking a tightrope": on the one hand, it wants to use tariffs to reduce its dependence on China; on the other hand, it tries to avoid comprehensive retaliation from China before building alternative production capacity. However the reality is that the United States is heavily dependent on imports of key metals, and China is expected to escalate its retaliatory measures in the field of key metals.
First, the Biden administration has invested billions of dollars to rebuild domestic production capacity for critical minerals, but progress is likely to be slow.
The United States plans to reopen an antimony mine in Idaho, but first production is not expected until 2028. The only antimony processor in the United States, American Antimony, plans to increase production but still needs to ensure sufficient third-party supply. The United States has not produced any native gallium since 1987.
At the same time, the biggest problem facing the United States is the extent to which China dominates the supply chain in the field of critical minerals. According to the Center for Strategic and International Studies, a US think tank, China is the largest supplier of 26 of the 50 minerals currently listed as critical minerals by the US Geological Survey. Many of these minerals are on China's "dual-use export control list" along with gallium, germanium, and antimony.
The report pointed out that for the United States, China's announcement of stricter control over graphite exports is an "ominous sign", indicating that the tit-for-tat situation between China and the United States is spreading to the field of battery metals. This means that "if China's high-tech industry is further sanctioned by the United States, China still has multiple channels of attack."
Reuters said that US President-elect Trump has threatened to impose comprehensive tariffs on all Chinese goods before taking office. But the biggest question for the future Trump administration is how much the United States can resist China's counterattack in the field of key metals.
In this regard, Stephen Roach, a well-known American economist and senior fellow at Yale University, recently published an article warning the US government. He pointed out that China's rapid counterattack this time caused a "surgical strike" on key US industries; if the United States continues to escalate the trade dispute, China's retaliatory actions may also expand, because "China still has many 'trump cards' in its hand."
On December 17, Hong Kong's South China Morning Post quoted an analysis that although some of China's recent countermeasures are aimed at the Biden administration, these swift actions have provided "clues" for how China will deal with the next US administration led by Trump. "China dares to fight and is good at fighting" and "it takes two to tango"... Chinese scholars even emphasized that China is ready for Trump.
The US Politico website also cited expert analysis that these measures by China are more targeted at the incoming US President-elect Trump rather than the current President Biden. "The Chinese are good at looking to the future, and this is a signal to the next US administration."