China’s limits on chip metals self-defeating

“I think it’s a self-defeating move because I believe that will only reinforce the determination of many other countries in the world to de-risk,” Sullivan said Sunday in an interview with CBS’s Face the Nation.

Those countries will be spurred “to find ways to reduce dependencies and increase the resilience of their own supply chains, including for the kinds of minerals that are at issue in this particular decision,” he said.

China has said that gallium and germanium, along with their chemical compounds, will be subject to export controls meant to protect Chinese national security starting Aug. 1. It’s the latest episode in a growing tit-for-tat trade war over dominance in technology between China on one side and the US and Europe on the other.

President Joe Biden’s administration has been stepping up diplomacy to tell Beijing that while the US doesn’t intend to “decouple” from trade with China, it will defend what it views as its national security interests.

China’s export curbs follow US-led efforts to restrict exports of advanced chip-making technology to China and the Biden administration is said to be planning to block sales of some chips used to run artificial-intelligence programs. China is the dominant global producer of gallium and germanium.

Sullivan again spelled out the broader US stance, which Treasury Secretary Janet Yellen conveyed to top Chinese officials during a trip to Beijing this month.

“We’re not looking to end all trade with China,” he said. “What we’re looking to do is have a small yard of restrictions on technology with national security implications and a high fence around that yard.”

“That’s what we’re going to continue to do and China of course will have to make its own decisions,” Sullivan said.

John Kirby, spokesman for the National Security Council at the White House, rebutted criticism by Republican lawmakers that the administration’s recent engagement with China signals weakness.

“Diplomacy is not weakness, it’s strength,” Kirby said on Fox News Sunday. “And that’s what we’re pursuing right now.”