China banned sale of these minerals to the U.S. It matters to all of us

The ban will challenge many semiconductor manufacturers in the coming months. After two years of flat consumer demand, exacerbated by the global semiconductor shortage, many companies are predicted to struggle to stay afloat. Access to critical raw materials like gallium, germanium, and antimony is becoming increasingly important due to the heightened demand for electronics due to AI.

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The Diplomat reports that the resulting supply disruptions from China’s new export ban could have a multibillion-dollar impact on the U.S. economy. For example, the U.S. Geological Survey recently calculated that if China blocked all exports of gallium alone, U.S. gross domestic product could decline by up to $8.2 billion.

Since China’s export ban takes immediate effect, the U.S. defense industrial base could experience short-term mineral shortages and higher prices. This should not be taken lightly: mineral shortages can impede defense manufacturing and undermine the strength of the military, just as the United States experienced during World War II.

The Center for Strategic and International Studies stressed a key victim in this trade war is the U.S. military.*

“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,” it said. “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.”