China yesterday announced new rules for Chinese companies to export germanium and gallium, important raw materials for the cleaner energy transition. Companies in China must now first apply for permission from the Chinese government to export these raw materials.
“The new rules on exports are annoying, but the raw materials are not the most annoying to remove from the supply chain”
High-tech expert Paul Verhagen of the Center for Strategic Studies in The Hague (HCSS) calls the new rules “annoying, but not the most annoying thing to remove from the supply chain.” There are other places you could get it from. It is more expensive, but it is not the most critical of critical raw materials.’
China introduced the new rules in response to the Dutch government’s decision to further expand existing export restrictions on chipmaker ASML on Friday. As a result, the Netherlands has proved to be the catalyst for new measures that will also affect other countries.
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According to international economics professor Steven Brakman of the University of Groningen, the trade war is part of a trend that has been going on for some time. “US Secretary Yellen is going to China this week and wants to clear things up. People are busy making that trade war a success, and so you need a change.’
Brakman says the tariffs countries impose on each other can be seen as a change. “Actually, a tariff is a very stupid tool. You make a product artificially expensive for your own consumers, so you want to get rid of it. It goes both ways, so it’s an easy way to take the chill out of the air.’