China Implements Export Restrictions on High-Tech Metals Ahead of Yellen’s Visit, Escalating Trade Tensions with Washington

In anticipation of Treasury Secretary Janet Yellen’s upcoming visit to Beijing, China has decided to impose export limitations on two metals widely utilized in computer chips and solar cells. This move further exacerbates the ongoing high-tech trade dispute between China and the United States.

The Chinese Commerce Ministry announced late Monday that the restrictions on gallium and germanium are being implemented in order to “safeguard national security.” Once the regulations take effect on August 1, exports of these metals will require official permission, though specific details regarding the restrictions have not been disclosed.

China’s President, Xi Jinping, and his administration have been increasingly frustrated by the U.S.’s imposition of restrictions on access to advanced processor chips and other technological advancements due to security concerns. However, Beijing has been cautious in its retaliatory actions, likely to prevent disruption to China’s emerging chip developers, artificial intelligence innovators, and other technology sectors.

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Yellen’s visit, scheduled for Thursday, is part of the Biden administration’s efforts to mend relations between the two countries, which have reached their lowest point in decades due to disputes regarding technology, China’s military advancements, human rights issues, and other contentious matters.

China serves as the largest global supplier of gallium and germanium, which are essential for the production of computer chips for mobile phones, automobiles, and various other products. These metals are also crucial components in the manufacturing of solar panels and military technology.

According to the U.S. Geological Survey, nearly half of the United States’ supply of gallium and germanium is directly sourced from China. In 2022, China exported approximately 23 metric tons (25 tons) of gallium and produced around 600 metric tons (660 tons) of germanium per year.

In response, the United States has restricted Chinese access to advanced chips and the associated manufacturing technologies, successfully persuading allies such as the Netherlands and Japan to limit the export of chipmaking tools.

These actions by the United States pose a threat to the ruling Communist Party’s ambitions of propelling China’s prosperity and increasing its global influence by leading in areas such as clean energy, telecommunications, artificial intelligence, and other key technologies.

In May, Beijing implemented a ban on the use of products from Micron Inc., the largest U.S. producer of memory chips, in computers and sensitive network equipment.

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More about trade tensions

• China Imposes Export Curbs on High-Tech Metals
• China’s Commerce Ministry Statement on Export Restrictions
• US-China Relations at Lowest Point in Decades
• Gallium and Germanium in High-Tech Applications
• Biden Administration’s Efforts to Revive US-China Relations