iStock; Rebecca Zisser/BI
China has retaliated against the Biden administration's semiconductor export controls by banning shipments of key materials to the US, ramping up the global chip war ahead of Donald Trump's second term.
China's Ministry of Commerce said on Tuesday it would halt exports to the US of items relating to minerals and metals that can be used for both civilian and military purposes.
The so-called "dual-use" materials include gallium, germanium, antimony, and superhard materials. The announcement also included stricter export controls for items related to graphite, a highly conductive "wonder material." These materials are used to build semiconductors, batteries, advanced electronics, and solar panels.
China and the US have been locked in a technological race to the top over AI and military tech. Blocking the movement of materials essential to these industries is the latest tactic to be deployed.
The US is heavily dependent on China for gallium and antimony imports. While the US produces some germanium, China produces 98% of the world's supply, according to the US Geological Survey. The government agency published research in November that said losing access to germanium and gallium imports could add up to "billions of dollars in losses" across the US economy, with the fallout concentrated most in the semiconductor industry.
China's retaliation follows President Joe Biden's third wave of sanctions against US companies exporting materials to China's chip industry, announced on Monday. The ruling restricted US exports to 140 Chinese companies, including Huawei and Semiconductor Manufacturing International Corp.
"The US has broadened the concept of national security, politicizing and weaponizing trade and technology issues, and abused export control measures," China's commerce ministry said in a statement, adding that the measures are effective immediately and are being implemented to "safeguard national security."
On Sunday, Gina Raimondo, the US's commerce secretary, told reporters at Reuters, The New York Times, and others, that Biden's latest restrictions are "the strongest controls ever enacted by the US to degrade the People's Republic of China's ability to make the most advanced chips that they're using in their military modernization."
Trump has indicated that he'll continue to pressure China's tech industry. In Trump's first term in office, he placed up to 25% tariffs on Chinese goods. During his 2024 presidential campaign trail, Trump said he would bump that number up to 60% if necessary. And in a June interview with the social-media personality Logan Paul, Trump called China the "main threat" to the US AI industry.
The Department for Commerce did not immediately respond to a Business Insider request for comment, made outside normal business hours.
