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The tech trade wars between the U.S. and China are heating up again. China is restricting U.S. access to two key metals — germanium and gallium — that are used to make solar panels and computer chips for mobile phones, cars and other products. China’s move is in response to the export controls the Biden administration put in place last October which prohibit Chinese companies from buying advanced chips and chip-making equipment from the U.S. without a license.
Straight Arrow News contributor Peter Zeihan explains why this particular restriction from China doesn’t worry him so much.
Excerpted from Peter’s July 7 “Zeihan on Geopolitics” newsletter:
We’re continuing our conversation on China’s inability to govern itself, and this is the cherry on top of it all … China restricting the export of metals used in green tech and semiconductor tech to the United States.
If you’ve followed along for a while, you know that the US doesn’t have to worry about rare earths, but germanium and gallium don’t fall into that category. Spoiler alert – I’m not too worried about these either.
While the Chinese may dominate the production of these metals, it can be attributed to subsidies and no one else wanting to do the “dirty” work. There’s nothing uber-challenging about the process; it just requires someone that’s willing to get their hands dirty.
As the bilateral relationship with China grows more hostile by the day, knee-jerk reactions like this material export ban will do nothing but encourage Americans of all political stripes to cut ties. Ironically, China has become the biggest promoter of the US moving as fast and far away from Chinese dependency as possible.
If the Chinese really want to start a material input war, they might as well start the countdown sequence because they would be f****d.
