China bans certain rare earth minerals sales to the U.S.: The upshot

China has announced a ban of rare earth mineral exports to the United States, impacting government procurement and national security along with domestic battery and solar panel production.

The move comes during a period of upheaval in international trade, with President-elect Donald Trump consistently vowing to impose heavy tariffs on Chinese goods and the European Union voting to impose tariffs on electric vehicles made in China.

What’s the cause?

China is responding to the U.S.’s recently issued sanctions on Chinese semiconductor chips and equipment and to looming trade disputes with the incoming Trump administration.

“China has lodged stern protests with the U.S. for its update of the semiconductor export control measures, sanctions against Chinese companies and malicious suppression of China’s technological progress,” said Lin Jian, a Chinese foreign ministry spokesperson, in a Dec. 3 briefing.

What will be the impact?

The ban applies to several minerals, including gallium, germanium and antimony. Antimony is vital for the production of batteries, while gallium and germanium are both used to manufacture high-efficiency solar cells for solar panels. These critical minerals are also vital to the production of automotive and telecommunication tech, flame retardants, night-vision goggles, and nuclear weapons.

But there is a silver-lining.

“While gallium and germanium are use in solar cells, they are only used in specialty solar cells, such as those designed for space applications, rather than the solar panels commonly used for energy production in the U.S.,” said Melissa Barbanell, director of U.S.-International Engagement at WRI.

According to Barbanell, the US is 100 percent dependent upon imports of gallium, primarily sourcing from Japan and China.

“The U.S. is less than 50 percent net-import depending for germanium, importing approximately 40 percent of its germanium from Belgium and 25 percent from China and Canada,” said Barbanell. She followed up by confirming the U.S.’s dependency on China for antimony, saying, “The U.S. is 82 percent net-import depending, primarily sourcing from China.”

Barbanell continued that antimony is found in the glass used for energy generating solar panels, but since the U.S. imports the majority of solar glass, any immediate impact of the antimony ban is likely to be contained.

“The U.S. also has domestic technology and facilities to recycle solar glass,” said Barbanell, “which can further mitigate potential supply risk.”

The halt on imports from China threatens to cripple the Biden administration’s ambitions to establish a viable domestic battery industry.

However, global supply chains are expected to be impacted, with industries like semiconductor production and electronics affected until the critical minerals can be obtained elsewhere. This will result in high costs for consumers as the products become more difficult and costly to manufacture.

What’s China’s role?

China, the world’s dominant producer of EV batteries, has long positioned itself as the sole provider of these minerals, ensuring its chokehold on supplies. 

Specifically, China controls:

• Over 80 percent of the global supply of gallium
• Approximately 70 percent of the global output of germanium
• Over 50 percent of global production of antimony.

“This is not China’s first effort to restrict exports,” said Barbanell, citing a 2023 incident that raised the global price of gallium by 56 percent. “Similar bans, like the newly imposed one, risk further price hikes, as China’s restrictions have historically driven up costs.”