China export curbs to impact US clean energy and defense
WASHINGTON
China's retaliatory export controls could take a toll on the growing U.S. clean energy sector and its defense industry, analysts say, as a trade tussle escalates between the world's two biggest economies.
Beijing announced last week it would ban exports of gallium, germanium and antimony to the United States, targeting materials used for everything from semiconductors to solar cells.
China also tightened restrictions on graphite, which is key to the electric vehicle industry.
The moves swiftly followed Washington's own curbs to hobble China's ability to make advanced computer chips.
While trade tensions have been simmering, Donald Trump's arrival at the White House in January is likely to ratchet up the temperature on trade.
Analysts say it would take time to assess the impact of the new Chinese curbs on U.S. industries, though any immediate hit should be limited.
"This certainly could drive up costs," said Arun Seraphin of the National Defense Industrial Association. "It could create situations where you can't produce what you need."
"It's certainly going to drive a lot of uncertainty for companies who want to plan out their supply chain," he told AFP.
China is a major producer of the three metals in question.
In August, it unveiled export controls on some antimony products and since then, shipments have plunged.
Restrictions announced in 2023 on gallium and germanium also hit exports to the United States.
"Gallium, germanium, and antimony are vital inputs for defense technologies," said Gracelin Baskaran and Meredith Schwartz of the Center for Strategic and International Studies (CSIS) in a recent analysis.
Gallium and germanium are increasingly preferred over traditional silicon for high-performance chips used in defense applications, CSIS added.
It noted these materials have properties that boost device performance, speed, and energy efficiency.
Antimony is used in fireproofing and has defense-related uses, too.
While China is investing in munitions and buying high-end weapons systems more rapidly than the United States, the U.S. industrial base lacks capacity to meet defense tech production needs, the report warned.
"Bans on vital mineral inputs will only further allow China to outpace the United States in building these capabilities," it said.
The U.S. Geological Survey estimates that if China's net exports of gallium and germanium were completely restricted simultaneously, U.S. GDP could decrease by $3.4 billion.
Besides defense, gallium-based semiconductors are used in radio frequency electronics, LEDs for lighting and high-efficiency solar cells.
Although gasoline vehicles do not call for graphite, electric vehicles (EVs) require an average of 136 pounds (61.7 kilograms) of the material, CSIS said.
This could prove dicey for the United States, which has spurred billions in private sector investments for its domestic EV supply chain through subsidies via the Inflation Reduction Act.
