China strikes back against US ‘weaponization’ of trade

Beijing has responded to Washington-imposed curbs by restricting exports of key rare metals and some dual-use items

China has announced a ban on shipments to the US of several dual-use items and key raw materials used in semiconductor manufacturing and military applications. The move comes in response to the latest US sanctions. 

On Monday, Washington unveiled restrictions on the export of a broad range of chipmaking tools and software to the Asian nation.

According to a statement issued by the Chinese Ministry of Commerce (MOFCOM) on Tuesday, the retaliatory measures have been introduced in order to safeguard national security interests and fulfill international obligations.

Under the new regulation, China will prohibit the export of dual-use items to US military users or for military purposes. It will also strictly control the export of gallium, germanium, antimony, and superhard materials, as well as graphite-related dual-use items to the US.

The listed rare metals are used in the making of computer chips and a variety of other products, such as solar panels and advanced radar equipment. China is the world’s top producer of gallium and is a leading exporter of germanium.

The US hasn’t produced any gallium since 1987 and relied on China for 21% of its imports of the material between 2019-2022, according to the US Geological Survey. Imports more than halved when compared to previous years due to higher tariffs slapped on shipments to the US by Beijing.

The MOFCOM warned that any organization or individual from any country or region that violates new regulations will be held accountable in accordance with the law. The regulation comes into effect immediately.

The US Department of Commerce announced on Monday that it would ban the export of 24 types of chip manufacturing equipment, three software programs, and high bandwidth memory to China. Additionally, 140 Chinese entities – including toolmakers, chip fabricators, and investment firms – were added to the department’s blacklist over their role in developing China’s domestic semiconductor industry.

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Commenting on the issue, a MOFCOM spokesperson told reporters on Tuesday that in recent years, the US “has overstretched the concept of national security, politicized and weaponized economic and technological issues, abused export control measures…” 

Such practices seriously undermine international trade rules, the legitimate rights and interests of enterprises, as well as the stability of global industrial and supply chains, the spokesperson said.

The world’s two largest economies, the US and China, have in recent years been jostling for domination in key technology areas, including semiconductors. Washington has repeatedly tightened export controls to prevent Chinese firms from buying certain American components, citing risks to national security.

Beijing has slammed the export curbs, claiming that they run counter to globally recognized market rules.