On Tuesday, December 3, China announced stringent export restrictions on “dual-use” technologies for both civilian and military use, specifically targeted at the United States. These restrictions double down on previously announced controls on these metals, going so far as to ban shipments of antimony, gallium, and germanium to the United States. The new restrictions marked several firsts in the trade war—the first time Chinese critical minerals export restrictions were targeted at the United States rather than all countries and the first time restrictions on critical minerals were a direct response to restrictions on advanced technologies. Critical mineral security is now intrinsically linked to the escalating tech trade war.
China’s announcement comes on the heels of the Biden administration’s crackdown this week on the Chinese semiconductor industry, the latest retaliatory action in a tit-for-tat technology trade war that has permeated throughout the Biden administration. Therefore, this week’s announcement from the Chinese Ministry of Commerce should not be viewed as a stand-alone development, but rather the latest move in a series of punitive export controls, justified by both nations as national security imperatives.
Q1: What actions did the Biden administration take this week to curb China’s access to advanced semiconductors?
A1: This week, the United States issued its most stringent crackdown on China’s semiconductor industry, limiting its ability to develop artificial intelligence (AI) for modern military applications and adopting regulatory reforms to strengthen the enforcement of previous controls.
The new restrictions prohibit the export to China of 24 types of semiconductor manufacturing equipment and three related software tools. They also prohibit the export of advanced memory chips, chipmaking machinery, and other semiconductor technologies to 140 Chinese chipmaking companies including major Chinese chip manufacturers and toolmakers. These companies were also added to the U.S. Department of Commerce’s Entity List—a blacklist that mandates U.S. firms to apply for export licenses that will be near impossible to secure. To make the blacklist more difficult to bypass, the United States will apply the foreign direct product rule, which will impact non-U.S. companies that utilize U.S. chips in their tools and make it difficult for U.S. firms to produce these tools in third countries and export to China. The rule is designed to tighten the chokehold on China’s semiconductor industry, preventing Chinese firms from circumventing the U.S. export bans by importing chips and machinery with U.S.-designed components. However, some allied countries may receive exemptions, affecting the efficacy of the rule.
Q2: How has China retaliated against the United States for this week’s restrictions, and which minerals are impacted?
A2: China’s Ministry of Commerce immediately responded by imposing export bans on several minerals used in semiconductor and defense technology manufacturing to the United States—a rapid retaliation by Beijing. China banned shipments of gallium, germanium, antimony, and so-called superhard materials to the United States due to their “dual military and civilian uses.” The export of graphite will now also be subject to greater scrutiny.
These restrictions come on the heels of the release of an updated Dual-Use Export Control List by China’s Ministry of Commerce. The list expands and consolidates a list of items deemed to have dual civilian and military uses. This updated framework introduces a unified system and facilitates stricter oversight to tighten China’s export controls. This list not only streamlined the implementation of this week’s export controls but leaves the door open for China to implement new export bans on other strategic minerals on the list such as tungsten.
Q3: What impact will these restrictions have on U.S. national security interests?
A3: Gallium, germanium, and antimony are vital inputs for defense technologies. China is making significant investments in munitions and acquiring high-end weapons systems and equipment at a rate that is five to six times faster than that of the United States. In terms of strengthening military preparedness, China is operating in a wartime posture while the United States is operating in a peacetime posture. Even prior to the new restrictions, the U.S. defense industrial base lacked the capacity and surge capabilities to meet defense technology production needs. Bans on vital mineral inputs will only further allow China to outpace the United States in building these capabilities.
One example of how restrictions undermine U.S. national security is antimony trade. Antimony has a number of defense technology-use cases. China is the world’s leading producer of antimony, accounting for 48 percent of global production and 63 percent of U.S. antimony imports. The United States has no domestic antimony production and severely limited stockpiles. Since antimony export restrictions were imposed in September 2024, antimony shipments from China dropped 97 percent while prices rose 200 percent. Elevating export controls from restrictions to a ban may not make a material difference in the antimony market considering U.S. firms have already had to adapt to the reality of an antimony supply gap over the last three months. By banning antimony exports and specifically targeting the U.S. market, Beijing sends a strong message to Washington that it is not afraid to further escalate the trade war by cutting off the United States from critical minerals needed for strategic industries.
Q4: What are the economic security implications of the new restrictions?
A4: Gallium and germanium are the two most vital minerals to develop the next generation of advanced chips. Gallium and germanium are increasingly being chosen over traditional silicon for high-performance chips used in defense applications due to their properties that boost device performance, speed, and energy efficiency. The future of semiconductors for defense applications depends on reliable supplies of high-purity gallium and germanium. A U.S. Geological Survey report last month estimated that a total export ban on gallium and germanium could result in a $3.4 billion loss in GDP for the U.S. economy.
Graphite exports are not banned entirely, but Beijing is further tightening the restrictions it first imposed in 2023. This poses a significant challenge to the United States. China accounts for 77 percent of natural graphite production, over 95 percent of synthetic graphite production, and nearly 100 percent of graphite refining. The United States, meanwhile, contains less than 1 percent of the world’s graphite reserves and is 100 percent import reliant. Synthetic graphite manufacturing projects are in the pipeline, but capacity remains limited.
Graphite is an important input for the electric vehicle (EV) industry. Gasoline and diesel vehicles do not require any graphite—but EVs require an average of 136 pounds of graphite. The EV industry is important for the U.S. economy. In June 2024, domestic automotive manufacturing jobs reached a 34-year high. The Inflation Reduction Act helped mobilize $114 billion in private sector investments in the EV ecosystem, which is expected to generate 99,600 jobs. Without graphite, there will be no EV industry.
Q5: How has the United States used targeted export controls against China over the last five years, and how have they impacted critical mineral supply chains?
A5: The United States and China began a trade war related to critical minerals and strategic technologies in 2019 when the Trump administration targeted Chinese communications giant Huawei with a series of export restrictions. The U.S. Department of Commerce added Huawei to the Entity List, curbing the company’s access to U.S. chips and barring it from the U.S. market. Huawei was able to circumvent some of the restrictions by importing chips from other foreign manufacturers. To close this loophole, the Trump administration followed with tighter restrictions blocking Huawei’s access to chips sold by third parties made with tools acquired from the United States. The Trump administration did not stop at Huawei, restricting dozens of other Chinese tech companies deemed national security threats, such as Semiconductor Manufacturing International Corporation, via the Entity List.
Over the last four years, the Biden administration has accelerated the trade war, rolling out tit-for-tat export restrictions on crucial products to the cutting-edge semiconductor industry. In October 2022, the Biden administration first issued semiconductor export controls designed to address the national security risks associated with China accessing advanced U.S. AI chips. The Department of Commerce’s Bureau of Industry and Security listed the types of chips that it intended to be subject to the rule, including graphics processing units, tensor processing units, application-specific integrated circuits, and others. In July of 2023, Beijing retaliated by announcing export restrictions on gallium and germanium, two semiconductor minerals that the United States does not domestically produce. Under these restrictions, U.S. firms were still able to import some Chinese materials with the correct licensing, although imports have fallen drastically.
In October 2023, the Biden administration expanded the 2022 controls with further restrictions on the export of AI chips and manufacturing equipment to China. China responded with restrictions on high-purity and high-quality graphite, citing national security concerns. This action concerned not only the U.S. chipmaking industry but also the EV industry still reliant on Chinese graphite as there was no U.S. graphite mine or synthetic graphite facility in operation at the time.
Over the last five years, the United States has focused on denying China cutting-edge AI chips and manufacturing equipment to prevent Beijing from producing advanced weaponry and AI systems. China has retaliated by targeting vulnerable U.S. critical minerals supply chains, restricting the export of vital semiconductor minerals like gallium, germanium, and graphite, and antimony for defense needs
With each iteration of export controls, the number of products has expanded, the controls have tightened, and the U.S. Entity List of essentially blacklisted Chinese companies has grown. This week, the trade war escalated with some of the most direct and drastic export controls for minerals needed for dual-use technologies—particularly semiconductors and military applications—specifically targeted at the United States for the first time rather than all jurisdictions.
Q6: How can the incoming administration ensure that U.S. firms have access to these critical minerals without imports from China?
A6: There is ample evidence that the trade war will escalate given the new administration is even more hawkish toward China and intends to impose higher tariffs. China’s Ministry of Commerce noted that Washington is “weaponizing trade and technology” under the guise of national security.
The United States will need to deploy incentives and financing instruments to encourage investments with “existing friends” and “new friends” to secure a supply of vital resources. For example, amidst the new graphite restrictions, investments in three African countries, Madagascar, Mozambique, and Tanzania—which cumulatively have 21 percent of the world’s graphite resources, compared to China’s 15.8 percent—will be important. The U.S. International Development Finance Corporation issued a $150 million loan to a graphite mining project in Mozambique in 2024.
For tungsten, which is facing potential restrictions and is vital for defense technologies, South Korea will be an important ally. The United States currently does not produce any tungsten. But Canadian firm Almonty Industries, which will reopen its Sandong mine and processing plant in South Korea in 2025, has committed 45 percent of its output to the United States through a long-term supply contract.
At present, the restrictions will have a limited impact given the affected commodities have already been hit by export restrictions. Following Chinese antimony restrictions in August of 2024, China’s shipments of antimony products plunged 97 percent. No shipments of Chinese wrought or unwrought germanium or gallium have been sent to the United States from China in the past year, despite the United States being a large market for the materials. Therefore, China’s announcement this week seems to be largely symbolic rather than practical.
However, China has dominance in a much larger number of commodities than these four minerals. Additional export controls—including bans—are likely as a new administration takes office with ambitious tariff policies and a history of trade wars.
Gracelin Baskaran is the director of the Critical Minerals Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Meredith Schwartz is a research associate for the Critical Minerals Security Program at CSIS.
