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Raw materials, chips, export controls: the counter-blockade

· Helfen statt Blockieren editorial team

Since 2022 the US has blocked high-performance chips and equipment for China. China responds with controls on raw materials it supplies almost alone. The EU is trying to free itself from the squeeze. In between are firms that need magnets, light-emitting diodes or control units, in Germany as in Japan, Korea or Brazil.

130 billionUS dollars in market value were lost by US suppliers after export controls on Chinese customersFederal Reserve Bank of New York, Staff Report 1096, February 2025
5,380US dollars was the price of a kilogram of germanium in Europe in October 2025, after 3,150 in JanuaryUS Geological Survey, 2026
37%of German manufacturing firms depended on China for important inputs in 2024, after 46 percent in February 2022ifo Institute and EconPol, 11 Apr 2024
96,600tonnes of cobalt may be exported by the Democratic Republic of the Congo in 2026, after an export halt in 2025IEA, policy database, decision 004/ARECOMS/2025

How controls became a counter-blockade

On 7 October 2022 the US introduced a licence requirement for advanced chips and chipmaking equipment for China and tightened it in 2023 and 2024. China did not respond with the same goods, but with what it has: raw materials. Since August 2023 exports of gallium and germanium have required a licence; Beijing justified this with the protection of national security. In December 2024 China banned exports of gallium, germanium and antimony to the US, and in April 2025 seven rare earths followed. What of this is suspended in November 2026 and what applies is described in the briefing “Raw materials and export control”; who acts against whom and how is shown on the map “Economic area against economic area”.

  1. US: rules on advanced chipsLicence requirement for advanced chips and chipmaking equipment for China, later tightened.
  2. China: gallium and germaniumExports only with a licence; justified by protecting national security.
  3. China: ban on the USNo more exports of gallium, germanium and antimony to the US.
  4. China: seven rare earthsLicence requirement for, among others, dysprosium and terbium and magnets made from them.
  5. Netherlands: NexperiaThe government intervenes in the chipmaker’s management under the Goods Availability Act; China halts exports from Nexperia’s plants in China.
  6. TruceChina suspends the October 2025 extension of controls and the export ban on the US for civilian recipients until 27 Nov 2026; the Netherlands suspends its Nexperia order.

Why this weapon works

The strength of raw material controls lies in concentration. According to the US Geological Survey, 99 percent of the world’s primary gallium came from China in 2025; Germany, Hungary and Kazakhstan have stopped production. For natural graphite, the material for battery anodes, it was 82 percent, for rare earth mining around 69 percent. In processing, according to the International Energy Agency, China is the largest refiner for 19 of 20 strategic minerals analysed, with an average market share of around 70 percent.

China’s share of world production, 2025

Percent. Gallium: primary low-purity gallium; graphite: natural graphite; rare earths and antimony: mine production (in processing China’s share is higher).

Raw materialChina’s share
Gallium (primary)99%
Natural graphite82%
Rare earths (mining)69%
Antimony (mining)36%

Source: US Geological Survey, Mineral Commodity Summaries 2026, sheets Gallium, Graphite, Rare Earths, Antimony (2025 estimates). Rare earths 270,000 of 390,000 tonnes, antimony 40,000 of 110,000 tonnes, own calculation. File daten/usgs_china_anteil_2025.csv.

Where one supplier is this strong, every restriction feeds through to prices. The average unit value of US gallium imports rose from 277 US dollars per kilogram in 2021 to an estimated 580 in 2025. Antimony, used for flame retardants and ammunition, cost on average 25 US dollars per pound in 2025, after 5.31 in 2021. Germanium for optical fibre and infrared optics became more expensive in Europe from 3,150 to 5,380 US dollars per kilogram between January and October 2025 alone.

Prices of gallium and antimony, 2021 to 2025

Index, 2021 = 100. Gallium: average unit value of US imports per kilogram (277 to 580 US dollars); antimony: metal price per pound (5.31 to 25 US dollars).

YearGalliumAntimony
2021100100
2022156116
2023132103
2024158193
2025209471

Source: US Geological Survey, Mineral Commodity Summaries 2026, sheets Gallium and Antimony; 2025 estimated. China introduced licences for gallium and germanium in August 2023, announced restrictions on antimony in August 2024 and banned exports of all three to the US in December 2024. File daten/usgs_preise_2021_2025.csv.

What it costs those who impose controls

Export controls are not free for those who impose them either. Economists at the Federal Reserve Bank of New York studied what happened to US suppliers whose Chinese customers were put on export lists. Together these firms lost around 130 billion US dollars in market value, profits, employment and lending fell, and they hardly found replacement customers at home or among allies. A single example from the chip industry, NVIDIA’s charge after a new licence requirement in 2025, is in “Economic area against economic area”.

What it means for firms in Germany

In autumn 2025 the Nexperia case showed how quickly geopolitics can become a stopped assembly line. On 30 September 2025 the Dutch government intervened in the management of the chipmaker, which is owned by a Chinese group, under the Goods Availability Act; it cited concern that technology and knowledge could flow abroad. China then imposed an export control on all Nexperia plants in China. On 21 October the German automotive industry association VDA warned that the situation could soon lead to significant production restrictions or even a production stop. In November China again allowed individual exports, and the Netherlands suspended its order.

Surveys by the ifo Institute show how dependent German industry is: in 2024, 37 percent of manufacturing firms said they relied on China for important inputs, after 46 percent in February 2022; 38 percent planned to reduce imports from China. How often materials were missing in November 2025 is in the magazine chapter “Blockades of the world economy”.

Not only between great powers

Export restrictions are not a tool of the US and China only. In its 2026 inventory the OECD finds that on average in 2022 to 2024 restrictions covered 67 percent of world trade in cobalt and 66 percent in manganese, 47 percent for graphite and 45 percent for rare earths; new restrictions in 2024 came from a broader group of countries, especially in Africa and Asia. The Democratic Republic of the Congo, the world’s largest cobalt supplier, halted exports on 22 February 2025, according to the authority ARECOMS to tackle oversupply and falling prices; since 16 October 2025 it has allowed only fixed quantities, 96,600 tonnes in total in 2026. For buyers worldwide this is one more uncertainty.

What the EU puts against it

The EU Critical Raw Materials Act has been in force since 23 May 2024. It sets benchmarks to 2030 for 17 strategic raw materials: 10 percent of annual demand from domestic extraction, 40 percent from domestic processing, 25 percent from recycling, and no more than 65 percent from any single third country. Whether this succeeds is open; processing supply chains take years, not months.

Two perspectives

What those who impose controls say

The US justifies the chip rules with national security and foreign policy: advanced chips should not flow into military applications.

China likewise justifies its raw material controls with national security; its Export Control Law allows restrictions to safeguard security and interests.

What those affected say

Firms without their own source of raw materials bear the costs of both sides: higher prices, licences of uncertain duration, delivery stops overnight.

For producing countries in the South, export rules are a way to keep more of the value of their raw materials at home; for their customers they are a new hurdle.

What firms can do now

Check bills of materials for raw materials from a single source, including at suppliers in third countries; stocks or second suppliers for the most critical parts; check one’s own goods list against the new EU dual-use list. Details and deadlines are in the briefing for companies.

This piece is information, not legal, investment or health advice. It makes no diagnoses. It reflects the view of the editorial team, relies on the sources listed and names opposing positions. “Helfen statt Blockieren” is non-partisan.

Sources

All online sources accessed on 3 November 2026. Data files for checking: daten/ of this series.

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