July 3rd came with a notice from China- their exports of germanium and gallium will now be incredibly limited. Coming in response to an October 2022 decision by the US to limit the exportation of supercomputer chips to China.
Both germanium and gallium are used extensively in high-speed computer chips, military equipment, solar panels, fiber optic cables, and numerous other applications. Their decision to remove a chunk of the core component for most radio and optical applications can place a chokehold on the global supply chain.
This move to remove such a crucial component means that the price of consumer goods that rely on these components could go skyrocketing. Thus, creating a small buying panic, thus sending prices higher. As the global tension between Beijing and Washington continues to crank up, many wonder if either country will limit other rare minerals that are used in things like smartphones, wind turbines, and electric vehicles.
Given President Biden’s proclamation that we are in a race against China after 28 months of him being in office, many are wondering how he thinks he is doing. Unfortunately for him, we are uncovering that he has been doing a far more horrific job than anyone could have imagined. A conflict with China is not what the US should be looking to get into.
If anything, the US should start looking into ways to cut China out of our necessity of crucial components and become independent of foreign resources. While our standards of production and workers’ rights laws mean that this will be a more expensive venture (especially up front), the payoff costs down the line are tremendous.
The politicization of precious metals by China will only get worse, so now is the prime time to make a change.
