The Chinese government has announced long-anticipated trade restrictions in retaliation to the US’ ongoing efforts to limit Beijing’s access to high-end chip technology.
China dominates global production and processing of germanium and gallium, critical components of semiconductors and several defense-related technologies such as radars and sensing systems.
China ultimately has limited retaliatory options in a trade war with the US, but Beijing’s dominance in materials processing is one of its most effective levers. An extended trade war will likely push the US and others to accelerate efforts to lessen dependency on China, ultimately weakening the efficacy of its limited trade-based retaliatory measures.
