China's export ban on critical minerals puts US defence industry at risk

The article from The Atlantic discusses the recent announcement by China's Ministry of Commerce regarding the export ban on critical minerals, such as gallium, germanium, and antimony, to the United States. This move could significantly disrupt U.S. defense supply chains, which rely heavily on these minerals for advanced military technologies like radar systems, night-vision devices, and munitions.

China’s dominance in the global market for these minerals—particularly gallium, where it controls about 98% of production—makes this export ban a considerable threat to the U.S. defense sector and broader economy.

The article highlights that the immediate effects of China’s ban could lead to mineral shortages, higher prices, and delays in the manufacturing of defense systems, echoing concerns about the vulnerability of the U.S. defense industrial base. The U.S. Geological Survey estimates that a ban on gallium alone could result in a $8.2 billion hit to the U.S. GDP. The U.S. is particularly vulnerable due to its reliance on China as the primary source of these minerals, with no immediate replacement options from other nations, even those that produce the minerals themselves.

In the longer term, the article notes that the U.S. could mitigate these vulnerabilities by investing in domestic mineral production and supply chain resilience. The incoming Trump administration, aware of the growing dependence on foreign adversaries for critical minerals, may build upon the previous administration's efforts to bolster U.S. mineral stockpiles and fund mining projects. Notably, U.S. government initiatives such as the Title 17 loan guarantees and the Defense Production Act fund could provide financial support for domestic projects to reduce reliance on foreign sources.

The article also suggests that China could extend its export bans to include other minerals vital to U.S. military and industrial sectors, including aluminum, titanium, and magnesium. This potential expansion underscores the importance of U.S. efforts to diversify mineral sources and reduce dependence on China and other foreign adversaries. While the long-term outlook may see improvements in supply chain resilience, the article stresses the urgency of immediate action by the U.S. government to address these vulnerabilities and safeguard national security interests.

In conclusion, the article highlights the serious economic and security risks posed by China’s export ban and calls for a robust U.S. response through increased investment in domestic mineral capabilities.