The trade war from china towards the rest of the world has intensified, and its latest moves to limit access to certain rare earths It is already having its consequences in the market. However, from the country of the yellow river they have announced that this it’s just the beginning and that much tougher measures are coming. How are the limitations on the export of certain raw materials already affecting?
Yesterday we told you that China will limit the export of Gallium and Germanium, two rare earths in the rest of the world, but which are highly available in that country, today we have to talk about the consequences. And it is that the price of both metals has risen considerably, and that the restrictions do not come into force until the next August 1. And it is more than clear that the trade war with China will make all technology more expensive. Especially when the government of that country has already declared itself on a war footing.
China escalates its trade war and raises it to a new level
As we have learned from Reuters, China’s measures on raw materials for making electronic components are already having an effect. And it is that the price of gallium has risen by 6% since the export limitation was announced. He Germanium experienced a 4.6% increase. These figures may seem very low to us, but we must bear in mind that hardly any time has passed and the limitations will not really take effect until August, so we should expect a growing rise in the price of these rare earths.
Although the computer industry will not be the most affected, it will be more so that of electric cars. The simple announcement by the Asian multinational has increased the demand for Gallium and Germanium, which has led to a price rise that does not seem to be going to subside. All this has served the Chinese government to know that its measure of pressure is effective. The former deputy trade minister has stated that This is just the start of a trade war by China which has escalated.
Shortage of rare earths, a tactic that is not new
China possesses certain world rare earths in high demand, especially for several key industries. This allows them to have strength when negotiating with other countries. They already made this move to Japan a little over a decade ago, greatly hurting various industries. Let’s not forget that all this is a product of a trade war waged by the United States and Europe by geopolitical interests and that is now beginning to have a response from China.
The next is to expect the list of rare earths for which China controls their export to grow. Already during COVID they learned the perverse effects of limiting access to certain components. Which is serving as a measure of pressure in this geopolitical battle that affected the international economy at all levels.