New export bans as, on Tuesday, December 3 Chinese officials announced an escalation to trade restrictions between China and the United States. Specifically, China has placed a ban on all sales of gallium, germanium, antimony, tungsten and other “superhard materials” to the United States. The ban comes as President Biden implemented new measures aimed at stopping the flow of advanced technologies and semiconductor chips to China.
Because China is the number one exporter of these rare earth metals, U.S. manufacturers are at a loss for where to source their supply. Many sources are suggesting that substitution by third countries or domestic sources could be the answer. The New York Times reports that, in 2010, when China imposed a similar ban on Japan, the Japanese government invested in a large rare earth metal mine in Australia. This not only minimized the damage from the Chinese export ban, but also reduced Japan’s long term reliance on China for rare earth metals.
Moving Away From Chinese Exports
As it so happens, U.S. companies may be taking a similar approach. The CEO of Perpetua Resources, which is currently establishing an antimony mine in Idaho, said to Reuters “We must get serious about American mineral sources…It’s time to end our reliance on China and secure our future.”
As President Elect Donald Trump suggests sweeping tariffs against China, China’s retaliation could make the rare earth metal situation more severe. If that happens, American manufacturers who use these minerals will need to be prepared with other suppliers standing by. While American rare earth metal mining is still in its infancy, third party countries may hold the key for maintaining the supply of these critical components.
Whatever comes, our team of experienced customs attorneys are here to help. If your company is considering importing rare earth metals from third countries, we can help with all your customs and tariff related issues.