China's dominance is not solely due to its mineral reserves, but also its extensive and long-standing investment in processing capacity. The by-product nature of these minerals means that increasing their supply independently is inherently challenging. If the primary metal market (e.g., zinc or aluminum) is depressed, or if the necessary processing infrastructure is lacking, even countries with potential reserves cannot easily ramp up germanium and gallium production. This creates a "by-product trap" where supply is unresponsive to direct demand signals for these critical minerals, compounding the vulnerability caused by China's market control. This structural characteristic means that diversification efforts require not just identifying new mineral sources, but also significant, long-term investment in the entire processing value chain for the primary metals, making rapid "reshoring" or "friendshoring" extremely complex and costly. The issue extends beyond just mining to encompass refining and processing capacity, areas where China has strategically invested over decades.
China's export restrictions on germanium and gallium represent a pivotal moment in global trade. Announced on July 3, 2023, and effective from August 1, these measures require exporters to obtain licenses for dual-use items, significantly delaying export approvals. The situation worsened on December 3, 2024, when China outright banned shipments of these metals to the U.S., including stringent penalties for violations. Export data showed an immediate impact: in August 2023, there were no exports of wrought gallium or germanium, a sharp decline from July when over 7,900 kg of germanium and nearly 7,000 kg of gallium were shipped. The licensing regime not only restricted supplies but also led to a 27% price increase in gallium after the announcements.
While initially presented as licensing requirements, the escalation to outright bans illustrates China's aggressive trade posture. Long processing times create uncertainty for exporters, allowing China to maintain economic leverage, disrupt supply chains, and force importing nations to diversify their sources while managing supply risks.
Date |
Event |
October 2022 |
U.S. announces export restrictions on advanced semiconductors to China |
July 3, 2023 |
China's MOFCOM announces export licensing measures for gallium and germanium |
August 1, 2023 |
Export licensing requirements officially take effect |
August-September 2023 |
Chinese customs data show no wrought gallium or germanium exports to the U.S. |
October 2023 |
China approves some export licenses for chip materials |
November 2024 |
MOFCOM announces new dual-use export control regime, including critical minerals |
December 3, 2024 |
China tightens controls, explicitly prohibiting shipments of gallium, germanium, and antimony to the U.S. |
China's export restrictions are officially justified on national security grounds, focusing on controlling strategic materials critical to defense and technology. The Ministry of Commerce requires licensing for exports that may have military uses, citing concerns over weapons of mass destruction.
However, these measures are widely seen as geopolitical responses, particularly in light of U.S. export restrictions on advanced semiconductors announced in October 2022. Analysts view China’s actions as a way to assert its dominance in global critical minerals supply chains, escalating trade tensions.
In addition to retaliation, the restrictions serve an intelligence-gathering purpose. The requirement for detailed end-use information from buyers allows China to map dependencies and vulnerabilities in the global supply chain. This dual strategy of controlling resources and collecting intelligence indicates a sophisticated approach to economic statecraft, compelling other nations to diversify their supplies and improve their intelligence on mineral flows.
China's export restrictions on germanium and gallium have immediate and far-reaching implications for the United States, exposing critical economic vulnerabilities and accelerating geopolitical shifts in global supply chains.
U.S. supply chains have faced significant disruptions due to restrictions on gallium and germanium, crucial materials for industries like semiconductor manufacturing, telecommunications, and aerospace. Market responses include sharp price increases, with gallium prices rising 27% upon the announcement of controls and an 18% rise from July to October 2023.
A complete halt of China's exports of these minerals could reduce U.S. GDP by approximately $3.1 billion to $3.4 billion, primarily due to decreased availability rather than price increases—6.1% for gallium and 2.2% for germanium. This scarcity threatens technological advancements, especially in high-performance semiconductors critical for communication devices and next-generation technologies like 5G. Defense contractors face severe implications, as gallium and germanium are vital for military systems, including radar and night-vision equipment. Alarmingly, 78% of U.S. military systems are vulnerable to dependence on these minerals.
While the estimated GDP impact may seem small relative to the overall economy, it is concentrated in essential sectors that influence future competitiveness and national security, suggesting a need for urgent strategic responses beyond simple cost analyses..
Gallium and germanium are by-products with fragile supply chains that can't quickly scale up to meet demand, amplifying disruption risks. The interconnected nature of modern industries means that restrictions on one mineral can have widespread effects.
Existing stockpiles are inadequate; while the U.S. maintains a National Defense Stockpile with some germanium, it has a small gallium stockpile and no domestic production. This emphasizes a critical strategic gap. The heavy reliance on foreign sources, particularly China, poses significant risks, with over 50% of germanium and 100% of gallium being imported.
Current private sector stockpiles aren't designed for prolonged export bans, revealing the vulnerability of the global "just-in-time" supply chain model to geopolitical issues. A shift towards resilience-driven supply chains, even at the cost of efficiency, is necessary to ensure security of supply.
China's actions unequivocally underscore the United States' dangerous dependence on a single, dominant source for critical materials essential to its economic and national security. This reliance has become a significant geopolitical vulnerability.
The export restrictions reflect China's strategic response to ongoing trade tensions, particularly with the U.S., thereby intensifying the broader "trade war". This creates a complex and uncertain environment not only for the U.S. but also for European importers, as China actively works to prevent gallium and germanium from indirectly reaching the U.S. through Europe. Such actions strain existing international partnerships and heighten geopolitical friction.
Crucially, the ban has served as a "wake-up call" for U.S. manufacturers, compelling them to rethink their supply chains and actively reduce reliance on foreign sources for critical materials. This has spurred urgent needs for diversification and incentives for reshoring production capabilities. The situation has also catalyzed efforts towards global coalition building, with the U.S. recognizing the imperative to lead a coalition of like-minded allies. The aim is to secure critical mineral supply chains by leveraging shared resources, coordinating investments, and forging new trade and processing partnerships. The G7, for instance, is actively agreeing on strategies to secure critical mineral supply chains in response to China's actions.
The military vulnerability stemming from this dependence is particularly concerning. As noted, 78% of U.S. military weapon systems are vulnerable to China's critical mineral dominance, and gallium alone is crucial for 3,800 military uses. This direct threat to defense capabilities elevates the issue from an economic challenge to a national security imperative.
China's actions are not just disrupting existing trade but are actively accelerating a fundamental shift in global supply chain architecture. The "wake-up call" and the G7's response indicate a move towards "bifurcation" of mineral markets, where Western allies seek to build independent, resilient supply chains, even if it means paying a premium. This represents a strategic decoupling in critical sectors, driven by geopolitical mistrust rather than pure economic efficiency. This case is a microcosm of a larger trend: the fracturing of globalized supply chains into politically aligned blocs. It signals the end of an era where economic interdependence was assumed to guarantee peace, and the beginning of a new geoeconomic order where supply chain resilience and national security override efficiency.
To bolster its supply of germanium and gallium, the U.S. has turned to a combination of executive action and targeted industry initiatives. In March and April 2025, the White House issued Executive Orders 14241 and 14285, directing federal agencies to fast-track permitting, unlock new financing streams, and open both onshore and offshore federal lands for mining and processing. Yet, unlike primary commodities, germanium and gallium are chiefly recovered as by-products of zinc and aluminum production—Teck’s Red Dog Mine in Alaska and various Tennessee operations for germanium, and U.S. Critical Materials’ Sheep Creek project in Montana for gallium. Recognizing the limitations of scaling by-product output quickly, the Department of Defense and private recyclers such as Umicore have also intensified efforts to reclaim these metals from end-of-life military equipment, fiber-optic cables, and electronic scrap. This multipronged approach seeks to offset the geographic and economic constraints inherent in relying on primary-metal markets, while also navigating U.S. environmental standards that can raise production costs well above those in competing jurisdictions.
Because germanium and gallium command niche but vital roles in high-performance technologies, the U.S. has devoted substantial R&D funding to find either new sources or suitable substitutes. Agencies like the U.S. Geological Survey, under the 2020 Energy Act, continuously update the Critical Minerals List and assess domestic deposits extending even to coal waste and acid-mine drainage. Meanwhile, the Department of Energy’s Loan Programs Office and national laboratories back projects exploring advanced extraction methods and processing innovations. On the substitution front, indium and silicon carbide are under evaluation for certain semiconductor and photonics uses, and silicon itself remains the closest contender to germanium in CPU and infrared applications. Yet each alternative carries performance trade-offs or higher production costs. As a result, R&D programs emphasize not only identifying replacements but also tailoring them to match or exceed the stringent electrical, optical, and thermal properties that only germanium and gallium can currently deliver.
In parallel with domestic efforts, U.S. policy emphasizes “friendshoring”: forging supply chains with trusted partners beyond the People’s Republic. While the Inflation Reduction Act restricts certain incentives to countries in formal free-trade agreements, policymakers argue for an expanded, resource-driven coalition that includes Australia, Canada, South Africa, Saudi Arabia, and emerging producers in Latin America and Southeast Asia. These alliances aim not only to tap primary reserves but also to coordinate midstream processing capabilities, recognizing that China’s dominance extends from raw ore through refining and chemicals. Recent G7 communiqués and proposed U.S.–Ukraine rare-earth accords illustrate a growing willingness among democracies to pool investments, share technical know-how, and align export and stockpiling policies, thereby reducing collective exposure to any single supplier’s export curbs.
Underpinning these production and partnership drives is a suite of policy levers designed to mobilize capital and orchestrate interagency action. The administration has empowered a National Energy Dominance Council, often dubbed a “critical minerals czar,” to synchronize efforts across more than a dozen agencies, from Interior to Defense. Public finance mechanisms such as the Defense Production Act and DOE loan guarantees have already directed hundreds of millions of dollars toward critical-mineral projects and regional consortia. At the same time, the U.S. has tightened its export controls on advanced semiconductors and technology, triggering reciprocal restrictions on germanium and gallium exports from China. Together with the Foreign Entities of Concern provisions in the IRA, these measures underscore a whole-of-government shift: no longer are minerals treated as merely commodities, but rather as instruments of national security and foreign policy.
Looking ahead, securing germanium and gallium supplies will require sustained, multilayered investments. Governments and industry must pursue source diversification—primary, secondary, and by-product alike—while scaling recycling and exploring unconventional feedstocks such as coal fly ash. Concurrently, R&D must intensify not only on material substitutes but also on process efficiencies that lower environmental impacts and costs. Strategic stockpiling will continue to play a buffer role, particularly for the smaller gallium market. Yet these steps are neither quick nor cheap: building new mines and refineries takes years and multibillion-dollar outlays, and recycling alone can meet only a fraction of global demand. As Western markets accept a rising “geopolitical premium” for non-Chinese supply, diplomatic alignments are already shifting—ushering in a mineral-centric era of resource blocs and trade realignments. Ultimately, the germanium and gallium case furnishes a blueprint for future critical minerals, where resilience trumps efficiency, and where controlling the raw materials of advanced technology becomes as consequential as any military or economic strategy.