China's Minerals Export Ban Has a Silver Lining for the US
It’s not ideal that support for the energy transition under Trump rests on geopolitical tensions, but the industry will take what leverage it can get.
A Lucid Air battery pack displayed at the company's showroom in New York.
Photographer: Yuki Iwamura/Bloomberg
China is the handmaiden to the energy transition — and will continue to be so once an anti-transition president occupies the White House again next month. As if to advertise that, Beijing announced on Tuesday that, in response to US export controls on advanced semiconductors, it was banning exports to the US of several critical minerals and tightening restrictions on sales of another, graphite.
Trade wars are, in general, not good for decarbonization. Falling prices for clean technologies are owed primarily to China’s low-cost supply. The domestic content provisions contained in President Joe Biden’s signature climate legislation, the Inflation Reduction Act, will inevitably put upward pressure on prices for those technologies, for a while at least. Yet unease at China’s hold over this sector, built with the help of decades of industrial policy support, is justified to some degree, as is an effort to build domestic capabilities in response. For critical minerals, this strategic element will be a vital support during President-elect Donald Trump’s second term.