China’s curbs on exports of germanium and gallium probably won’t make much of a dent on Japan’s economy. There would be a much bigger impact if China were to restrict rare earth exports as well. But there are good reasons to think the dispute won’t escalate further, not least because China may wish to preserve its position as the world’s dominant supplier of key industrial minerals. In any case, Japan is likely to respond by accelerating friend-shoring, which is already picking up.
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