China wants to imprison the world with its restrictions on rare earths. His greatest prey has escaped him

It’s been months since China presses the whole world with one of his great aces up his sleeve: rare earths. Last week he used them again to unbalance the balance of technological trade worldwide and imposed new restrictions to its export, but its attack has a gigantic hole. One called Taiwan.

rare earths to me. Taiwan’s economy minister has revealed that the country does not expect there to be a big impact from these new restrictions from China. The reason is simple: such minerals are different from the metals needed in the semiconductor sector that Taiwan’s manufacturers and production plants dominate.

Taiwan does not need China. In fact, both the products necessary domestically for the production of these chips and the rare earths used in their manufacturing processes come from Europe, the United States and Japan. This makes the country safe from the pressure that China wants to exert with its dominance of the rare earth segment.

China tries to force the hand. China expanded significantly export controls on rare earths last Thursday. It added five new items to its list of minerals with restricted exports, but also imposed new scrutiny mechanisms for chip users. The change is not minor: any product manufactured outside the country that contains just 0.1% of materials of Chinese origin will need a license to be exported.

TSMC safe. Taiwan is the largest chip factory in the world and for years it has TSMC as a major player in the sector. The company leads this segment and has become the great ally of the Western world when it comes to producing chips for the AI ​​industry. The Chinese restrictions do not appear to pose future dangers for TSMC and other manufacturers in the country, according to those statements.

But. Even so, the economy minister added that these additional controls could affect global supply chains for various products. To clarify better: the direct impact may not be noticeable, but yes it could be the indirect onebecause for example ASML’s EUV scanners use rare earth magnets that could end up suffering delays due to these restrictions.

And be careful with the “ripe chips”. For example, chips for electric vehicles and drones. China is precisely determined to dominate the mature circuit market: given that can’t compete At the moment with the most advanced manufacturing technology, what it wants is to be the main protagonist of less advanced but equally important chips in industries such as the automotive industry.

Restrictions as a lever to negotiate. China’s measures in this regard They are just part of that commercial and technological war that it maintains with the West and, especially, with the United States. The reaction of the US government was immediate, and Donald Trump announced 100% additional tariffs on Chinese imports. Both superpowers try to use their assets to put pressure on their rival while waiting for a imminent negotiation: Trump and Xi Jinping are expected to meet in South Korea in late October.

Image |Wikimedia | leannk