Critical Minerals Export Ban is China Tit-for-Tat with the United States
Channel: InvestorCoffee
Date: 2023-07-07

“The issue here is one of understanding. The Chinese didn’t stop exporting the materials. What the Chinese said, and what they are going to do is to restrict the exports, not prohibit them. This means that they have adopted a policy of tit-for-tat with the United States. We recently have restricted the export to China of very high-tech machinery to make the latest and greatest chips. Simultaneously, we have prohibited our own companies from buying Chinese-manufactured chips for use in their products without permission from our State or Commerce Department in the form of a ruling that such importation and/or use does not impact “national security.”

The Chinese are saying, OK, so if those are the rules of the game then, now, we’re playing also by those rules. We’re going to start playing by picking two materials that you don’t have available domestically in end-user form, the metalloid germanium, and the metal gallium. These two materials, are in fact, critical to the manufacturing of the chips, access to which you wish to prohibit China from getting.

Now the interesting thing is here the journalists have got this all wrong — they all call these metals, “rare earths”, and they couldn’t be more wrong, It’s frightening to think that they don’t understand what rare earths are, considering how important rare earths are to us in a different industrial context of use.

#Germanium is a member of the silicon family. #Gallium is chemically related to aluminum. Neither one of these are rare earths, and if I were teaching a course in general chemistry, I would fail anyone who said something like that. Alright, here’s the point. The United States Department of Defense actually has stockpiled germanium. That should tell you something. It’s really critical. It’s what I call a critical-critical mineral. OK, but not, for some reason that I don’t understand, gallium. Both of those, as I recall from my misspent youth, were produced in the United States and we were self-sufficient.....