The ‘Metal War’ Before the Military Parade: How Trump’s Chip Ban Ignited China’s Rare Earth Countermeasures and Global Supply Chain Turmoil

Introduction: The ‘Time Code’ of the Military Parade and Chip Ban

On September 3, 2025, the military parade celebrating the 80th anniversary of China’s victory in the War of Resistance Against Japan was held as scheduled. However, on the eve of the parade, the U.S. Department of Commerce suddenly announced an expansion of export restrictions on chip equipment to China, requiring companies like Samsung and SK Hynix to cease using American-made equipment in their factories in China. This precisely timed ‘technological strike’ not only exposed the Trump administration’s intention to use semiconductor technology as a geopolitical bargaining chip but also revealed the deep-seated competition between China and the U.S. over strategic metals such as rare earths, gallium, and germanium — the chip ban is the surface, while the resource war is the essence.

1. The ‘Chip Supply Cut’ Before the Parade: Why Did the U.S. Choose This Moment to Strike?

1. The ‘Time Window’ for Political Pressure

   The Trump administration chose to issue the ban on the day of the parade, intending to create public pressure to force China to make concessions in negotiations. However, this move instead exposed its strategic anxiety:

   • Exposed Weakness in Military Dependence: The U.S. F-35 fighter jet relies on 90% of its rare earth magnetic materials and 50% of gallium for high-end chips from China. The display of China’s self-developed equipment (such as Dongfeng missiles and J-20 fighters) directly strikes at its supply chain vulnerabilities.

   • Shifting Domestic Conflicts: With the U.S. midterm elections approaching, Trump attempted to shift voters’ attention from inflation and manufacturing decline by creating a ‘China threat.’ However, the reality that rare earth stocks could only last for three months significantly diminished the effectiveness of this pressure.

2. The ‘Double-Edged Sword’ Effect of Technological Blockades

   This ban not only targets advanced process equipment but also attempts to restrict key materials such as photoresists and EDA tools. However, this move accelerates the closure of China’s industrial chain:

   • Yangtze Memory Technologies’ 128-layer NAND chip mass production: Although its performance is slightly inferior to Samsung’s, its cost advantage has increased its market share to 12%;

   • Breakthrough in Domestic Lithography Machines: The 90nm lithography machine developed by Changchun Institute of Optics is entering the verification stage at SMIC, with supporting light source equipment achieving domestic substitution.

2. China’s ‘Metal Counterattack’: How Rare Earths, Gallium, and Germanium Became Strategic Weapons?

1. Rare Earth Control: From ‘Cabbage Price’ to ‘Hard Currency’

   China controls 60% of global rare earth mining and 90% of refining capacity. Before the parade, it directly impacted the U.S. military and new energy industries by reducing export quotas by 20% and imposing restrictions on military applications:

   • Neodymium-iron-boron magnetic material prices surged by 40%: Used in F-35 engines and Tesla motors, there are no alternative production capacities in the U.S., forcing Lockheed Martin to restart Cold War-era stockpiles;

   • Heavy rare earth reserves of dysprosium and terbium: After China restricted exports, Japanese magnetic material companies found their stocks could only last for six months, and Honda announced a delay in the mass production of electric vehicle motors.

2. Gallium and Germanium ‘Choke Points’: Precision Strikes on Semiconductor Materials

   China has implemented an export licensing system for gallium (68% of reserves) and germanium (41% of reserves), resulting in:

   • Gallium prices skyrocketed by 50% in one week: U.S. AXT company urgently applied for import licenses, but Chinese customs prioritized domestic chip companies (such as Sanan Optoelectronics), causing delays of over three months for overseas customer orders;

   • Impact on the Photovoltaic Industry: Gallium is used in HJT battery electrodes, and U.S. First Solar was forced to switch to cadmium telluride technology, but conversion efficiency dropped by 3%, losing European orders.

3. Full Industrial Chain Control of Strategic Metals

   China is building barriers through rare earth group integration and overseas mine investments (such as heavy rare earth mines in Myanmar):

   • Indonesian Nickel-Cobalt Project: Huayou Cobalt controls 25% of global nickel resources, providing raw materials for ternary lithium batteries, countering U.S. pressure on cobalt mines in the Democratic Republic of the Congo;

   • Salt Lake Lithium Extraction Technology: Qinghai Lithium Industry has reduced lithium carbonate costs to 30,000 yuan/ton, with Tesla’s Shanghai factory using domestic lithium raw materials to replace Australian imports.

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3. Market Turmoil: How Do Nonferrous Metal Prices Reflect Great Power Rivalry?

1. Rare Earth Permanent Magnet Sector Leads the Surge

   • Praseodymium-neodymium oxide prices exceed 1 million yuan/ton: Jinli Permanent Magnet’s profit margin increased from 25% to 45%, with a market value exceeding 200 billion yuan;

   • Inrova’s neodymium-iron-boron orders increased by 300%: Tesla and BYD are competing for production capacity, with delivery cycles extended to 180 days.

2. Differentiation Logic of Industrial Metals

   • Copper: New energy demand offsets the impact of the chip ban: LME copper prices stabilized at $10,000, and Jiangxi Copper is expanding high-end copper foil production (used for AI server cooling);

   • Aluminum: Green electricity aluminum cost advantages stand out: China Hongqiao’s hydropower aluminum production capacity accounts for 60%, with profits per ton of aluminum 4,000 yuan higher than European counterparts.

3. The ‘Dark Horse Market’ of Minor Metals

   • Antimony: Surge in demand for photovoltaic glass: Huayu Mining’s antimony production capacity is being released, with prices hitting 250,000 yuan/ton;

   • Indium: Domestic production of OLED screens drives demand: Zhuhai Smelter Group’s indium ingot price exceeds 2,000 yuan/kg, up 60% since the beginning of the year.

4. Future Projections: From ‘Parade Deterrence’ to ‘Resource Pricing Power’ in Global Rivalry

1. The U.S. Dilemma and Misjudgment

   • High Costs of Technological Decoupling: The U.S. needs to invest over $50 billion to rebuild its domestic rare earth supply chain, and it will take at least five years to form production capacity, during which it will lose $300 billion in military orders;

   • Cracks in the Ally System: The EU opposes imposing a 200% tariff on China, and Germany’s BASF is investing 10 billion euros in China to ensure the supply of photoresists.

2. China’s Path to Breakthrough

   • Technology-Resource Synergy: Huawei is collaborating with the Chinese Academy of Sciences to develop ‘rare earth-free permanent magnets,’ using ferrite and nanocrystalline materials to replace neodymium-iron-boron, with laboratory performance meeting standards;

   • Financial Tools Empowerment: The Shanghai Futures Exchange has launched ‘rare earth futures,’ and Zijin Mining has locked in 80% of raw material costs through hedging to mitigate price volatility risks.

3. Global Industrial Chain Restructuring

   • ‘China + Central Asia’ Digital Mineral Corridor: Kazakhstan’s copper mines and Uzbekistan’s lithium mines are included in the ‘Belt and Road’ framework, bypassing the transportation bottleneck of the Malacca Strait;

   • Resource Alliance under the RCEP Framework: China, Japan, and South Korea are jointly investing in African rare earth mines to establish a ‘de-Americanized’ supply chain, expected to be completed by 2026.

Conclusion: The ‘Silent Struggle’ Outside the Parade Ground

As the J-20 flies over Tiananmen Square, the domestically produced chips it carries no longer rely on American technology; as the rare earth permanent magnets drive the Dongfeng missiles through the sky, Trump’s ‘chip ban on parade day’ has already become a historical footnote. This game, which began with semiconductors and erupted in nonferrous metals, will ultimately prove that true strategic deterrence lies not in blocking the throats of others but in solidifying one’s own lifeline.

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