Highlights

• China controls over 60% of global germanium production.
• China controls over 80% of global gallium production.
• China uses mineral exports as a strategic geopolitical weapon.
• Recent export restrictions by China are a direct response to U.S. semiconductor and technology sanctions.
• This situation escalates the ongoing trade war.
• The global impact includes surging mineral prices.
• U.S., EU, and Japan are forced to seek alternative supply chains amid increasing tensions.

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Keith M. Rockwell writing for the Hinrich Foundation & Wilson Center offers a recent analysis, How China is Weaponizing its Dominance in Critical Minerals, pointing out that China’s recent export restrictions on gallium, germanium, and other critical minerals are a calculated geopolitical maneuver aimed at countering U.S. sanctions and reinforcing its dominance over global supply chains. Published in East Asia Forum (opens in a new tab), Rockwell draws parallels between Beijing’s current actions and its past rare earth embargoes, demonstrating how China leverages resource control as a strategic weapon.

The Key Points

Rockwell’s key arguments rest on four key points taken on by Rare Earth Exchanges. First, it centers on China’s dominance and strategic use of export controls.  For example, China controls over 60% of global germanium production, 80% of gallium, and 78% of antimony, positioning itself as an irreplaceable supplier of semiconductors, defense, and battery technologies.  Export restrictions are not new—China employed similar tactics in 2006 and 2010 with rare earths, prompting legal challenges at the World Trade Organization (WTO) and leading to a temporary retreat.

The second is retaliation against American trade and technology sanctions. China’s December 2024 ban on U.S. exports of critical raw materials is a direct response to Washington’s semiconductor sanctions. The U.S. tightened chip and quantum computing export bans, limiting sales from Japan and the Netherlands, escalating the tit-for-tat trade war.  Finally, Beijing’s February 2025 expansion of export controls on military, IT, and clean energy inputs signals an aggressive stance against Trump’s anticipated trade policies.

Third is the global impact of China’s critical mineral leverage. China’s dominance is a major supply chain risk, forcing the U.S., EU, and Japan to scramble for alternative sources.  Moreover, the price of gallium, for example, has surged 212% since 2020, illustrating how China’s restrictions drive up costs and incentivize new mining projects worldwide. Lastly, despite U.S. sanctions, Chinese companies like Huawei have proven resilient, developing domestic chip technologies and launching their own HarmonyOS operating system to counteract Western software bans.

Lastly, what will be American responses?  A more hardline sanction approach, or conversely, pragmatism.  With Trump’s return to the White House, Rockwell sees two potential outcomes: 1) a hardline approach, with 60% tariffs on Chinese goods, fueled by Trump’s hawkish advisors and/or 2)

a deal-making strategy where Trump, despite his rhetoric, negotiates access to China’s minerals and markets.

Importantly, the broader U.S. political landscape remains deeply distrustful of Beijing, making any détente difficult.

What are some gaps in Rockwell’s Analysis?

While the piece thoroughly outlines China’s dominance and its history of leveraging minerals as a geopolitical tool, several critical aspects remain underexplored.  For starter China has lots of internal risks and we at Rare Earth Exchanges are not sure they can afford a prolonged trade war.

While Rockwell acknowledges China’s slowing economy and demographic challenges, the author doesn’t explore whether China’s reliance on Western technology and investment could limit its ability to sustain prolonged restrictions. This is a real factor not to be ignored.

Could China’s own companies face collateral damage from a drawn-out minerals war, particularly if global firms accelerate efforts to diversify supply chains?

Regarding alternative suppliers, how quickly can the U.S. and its allies react? Rockwell highlights the global scramble for alternatives but doesn’t deeply assess how quickly Western nations can scale up critical minerals production. The U.S. has rare earth deposits but lacks refining capacity—will Canada, Australia, and African nations step in fast enough to counteract China’s dominance?  Rare Earth Exchanges suggests this would be difficult for a confluence of reasons at this stage.

Finally, what is the potential for economic and military escalation? Could these trade tensions spill into broader economic decoupling or even military posturing, particularly in the Taiwan Strait?  If China tightens its grip further, will the U.S. respond with more aggressive financial or military deterrents?

TheHigh-Stakes Game of Resource Geopolitics

Rockwell paints a compelling picture of China’s escalating mineral warfare, but the uncertainty of U.S. responses, global supply chain resilience, and China’s internal economic risks leave open major questions about how this battle will unfold. As Trump prepares to reshape U.S. trade policy, the world watches to see if he doubles down on sanctions or strikes a deal—either way, the era of stable trade relations between the world’s two largest economies is long gone.