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The west and China continue to slip towards a meaningful trade war.
The US announced it would curb exports of AI chips to China and now China has announced it will control exports of gallium and germanium, two rare earth metals. The metals are used in chipmaking and electric vehicles.
The announcement will be top of mind when US Treasury Secretary Janet Yellen visits China on Thursday as she aims to stabilize the relationship.
The FT, citing officials and experts in China, warns that further retaliatory measures are expected from Beijing. The nightmare scenario is that they hoard lithium because they’re by far the world’s largest producer of the metal that’s critical for battery technology.
Adding to the worries, last week China passed a foreign relations law that strengthens national laws to apply countermeasures to western economic protectionism.