. However, the move is not considered “a death blow” to the United States and its allies.
China may be the industry leader, but there are alternative producers, as well as available substitutes for both minerals, the Eurasia Group analysts pointed out.
The United States also imports a fifth of its gallium from the United Kingdom and Germany and buys more than 30% of its germanium from Belgium and Germany.
Are there more curbs coming?
Analysts say Beijing could escalate its response further, if its move to control gallium and germanium fails to persuade the US to back down. Rare earths, which are not difficult to find but are complicated to process, are also critical in making semiconductors, and could be the next target.
“If this action doesn’t change the US-China dynamics, more rare earth export controls should be expected,” Jefferies analysts said.
However, analysts from Eurasia Group warned that restricting exports is a “double-edged sword.”