8JULY - AUGUST 2025By Thomas LAGRIFFOUL, Regional Director of Compliance APAC, CofaceHOW CAN THE AMERICAN TRADE FINANCE COMPANIES MANAGE PRESENT (AND FUTURE?) CHINESE MINERAL EXPORT CONTROL MEASURES?Escalating Export Controls: China's Retaliatory Measures and their Impact on Critical IndustriesAs a retaliation measure against US export restrictions targeting Chinese semiconductor, China has banned on December 3rd minerals export to the US. The targeted materials are vital for industries like semiconductors and green technologies. For example, China has imposed export licensing requirements on gallium, germanium, and graphite, which are critical for semiconductors, batteries, and military applications. China has tightened Chinese export control measures since 2023. In August and September 2023 the Beijing government required an export license on gallium, germanium, and then on antinomy and superhard materials. This month the government converted these licensing requirements to a total ban on the US.A Significant ChineseExport Control MeasureIt is not the first time China bans export minerals to the US. However, this ban set a new precedent: China makes accountable any organization or individuals which may export directly or indirectly (through transshipment) from China to the US banned minerals. That escalation will affect international trade and supply chain. That will also affect its industry.This move marks a change in China's long strategy. China has consistently criticized efforts by other nations, especially the United States, to enforce extraterritorial sanctions (like restrictions on the re-export of goods by companies operating outside their jurisdictions). Beijing's restrictions will further fragment global supply chains and international trade, and what analysts call `decoupling', compelling businesses to decide whether products containing specific materials and components will be restricted to the U.S. market or the Chinese market. The driver of these restrictions may also be for Beijing to attract European and Japanese companies to prioritize investing and building supply chains within its borders rather than in the United States.Likely Next Sanctions onMineralsThe escalation of restrictions is likely as tensions with the U.S. persist over national security and trade concerns. Analysts suggest that additional sanctions may target:1. Tungsten: Used in aerospace, automotive, and military sectors, with China dominating global production.2. Rare Earth Elements (REEs): Essential for electronics, magnets, and lasers, where China holds a significant processing advantage.3. Vanadium: Vital for high-strength steel and advanced batteries(https://triviumchina.com/research/g a m i n g- out- ch i n a s-nex t- ex por t-controls-on-critical-minerals/)Beijing will avoid affecting its own industries but will focus on restricting exports of minerals that he is the top producer. Supplier countries will have to be aligned about export controls on minerals like lithium hydroxide.Mitigating Action byAmerican CompaniesThe American companies are working with allied countries such as Canada, Germany, and Japan to diversify suppliers' source these critical materials. For instance, Canada and Australia but also Malaysia (https://theedgemalaysia.com/node/737495) is ramping up their capabilities in mining Thomas LAGRIFFOULOPINIONIN MY
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