China announced abrupt controls on exports of some gallium and germanium products, effective from August 1, which in turn has ramped up a trade war with the United States. The same could potentially cause more disruption to global supply chains, reported Reuters.
“Chinese industry players also fear that curbs on rare earth exports could follow,” the news added.
The news quotes Peter Arkell, chairman of the Global Mining Association of China, saying "China has hit the American trade restrictions where it hurts."
The Commerce Ministry will meet with major producers of the metals on Thursday to discuss the export restrictions, four people familiar with the matter told Reuters.
China’s latest retaliation is in reaction to the US curb on AI chips’ shipments to Beijing. On the same line is the news from the Wall Street Journal (WSJ) that the Biden administration is preparing to restrict Chinese companies’ access to U.S. cloud-computing services.
Key details
One US semiconductor wafer manufacturer said on Tuesday it was applying for export permits, while a China-based germanium producer said buyer enquiries had come in as prices surged.
The eight gallium and six germanium products cited are also used in other high-tech industries.
Some in the metals industry said they feared China could follow with new restrictions on rare earth exports, after curbing shipments 12 years ago in a dispute with Japan.
AUD/USD grinds higher
The news fails to gain any major immediate directions amid the US holiday but can weigh on the sentiment during the full markets.
Also read: Forex Today: After a quiet day attention turns to FOMC minutes
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