China’s Mineral Export Ban Strikes at the US Defense Industrial Base

Gregory Wischer, Morgan Bazilian, and Jahara “Franky” Matisek

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On December 3, China’s Ministry of Commerce announced that “the export of dual-use items such as gallium, germanium, antimony, and superhard materials to the United States will not be permitted.” This announcement likely means that over 20 mineral items – encompassing both metals and chemicals – are banned from being exported from China to the United States.

Many of these items are important to U.S. national security. For example, antimony is found in bullets and artillery rounds; gallium is used in integrated circuits for advanced radar systems; and germanium is needed for night-vision and thermal-sensing systems. Without adequate supplies of these elements, the defense industrial base could be delayed in manufacturing the downstream munitions and weapons systems, undermining the warfighting capabilities of the U.S. military.

Critically, China – the United States’ “most consequential strategic competitor” according to the 2022 National Defense Strategy – is the largest source of U.S. imports for antimony metal and oxide, as well as germanium metal. China is also the second largest source of U.S. imports for gallium. 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 resulting supply disruptions from China’s new export ban could also have a multi-billion-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.

Importantly, firms in third-party countries that import antimony, gallium, and germanium from China and then export them to the United States would violate China’s export ban and “will be held accountable according to [the] law.” While firms in other countries do themselves produce these minerals, these firms may not have enough production and uncontracted capacity to fully replace U.S. imports from China. For instance, China has a near monopoly on gallium production, producing about 98 percent of the world’s gallium annually.