Just days before U.S. Treasury Secretary Janet Yellen visited China, Chinese officials made their latest chess move against the Biden regime concerning its dominance over rare earth minerals and refining, and how healthy economic competition will benefit both countries.
Since the U.S. also produces semiconductor equipment which is important for China's economic growth, this back-and-forth trade war we are witnessing will likely continue to escalate, possibly leading to war.
"China apparently does not like the news that the Biden administration is considering a wider semiconductor chip ban and decided to ban the export of gallium and germanium, which are used in semiconductors, 5G base stations, and solar panels," wrote Louis Navellier, founder of Navellier & Associates, in a recent note to clients.
"Although the U.S. and its allies depend on China for these critical minerals, China needs Western technology such as lithography machines to produce high-performance chips."
(Related: China and Russia are moving closer to forging a formal alliance as World War III inches closer.)
News of the export ban on both gallium and germanium sent the price of gallium upwards by 27 percent. The gallium market is currently well-supplied, but the export controls that will begin in August have buyers scrambling to purchase more now before prices go up even further.
According to Fastmarkets, gallium prices leaped up $43 on the week, reaching $326 per kilogram.
Beginning on August 1, exporters will have to apply for licenses with China's commerce ministry to ship either of these two metals abroad. How these export controls will affect Chinese shipments will still need to be ironed out.
"This is a further example of how industrial raw materials are becoming increasingly strategic in global markets and brought to the center of policy action," said Colin Hamilton, managing director for commodities research at BMO Capital Markets, in a note, adding that Western countries are likely to respond to the export ban by seeking these two metals from somewhere other than China.
In 2022, the U.S. imported around 14,000 kilograms of germanium while consuming about 30,000 kilograms of it. That same year, imports of gallium reached 14,000 kilograms as well, while consumption was around 18,000 kilograms.
The supply deficit for both metals means the U.S. will need to not only stockpile more gallium and germanium, but also to do so from sources outside of Asia.
While the move by China is "far from being the nuclear option that it could have been," according to Bernard Dahdah, an analyst at Natixis, it does represent the "first warning shot."
"China does control other metals through which it can inflict more severe consequences," he added.
To help boost domestic mining and processing capacity for gallium and germanium here in the U.S., the Defense Department announced that it is invoking the Defense Production Act.
"Hand wringing over a small scale and justifiable reciprocal action by China?" wrote one commenter, perplexed at how U.S. leaders have the gall to criticize China despite making the first move – and despite the U.S. having already imposed much worse sanctions on much of the rest of the world.
"Half of the global population is under sanction by the U.S. or has been subject to extra-judicial asset seizure. The chutzpah."
"American exceptionalism at its finest," responded another.
The latest news about the conflict with communist China can be found at Communism.news.