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Quantifying Potential Effects of China’s Gallium and Germanium Export Restrictions on the U.S. Economy

Open-File Report 2024-1057
By: , , , , and 
https://doi.org/10.3133/ofr20241057

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Plain Language Summary

China’s export controls on gallium and germanium illustrate concerns about the reliability of supplies of mineral commodities that are essential to economic development, national security, and transitioning to renewable energy. The U.S. Geological Survey created a new model to quantify the potential effects of mineral commodity supply disruptions from Chinese net export restrictions of gallium and germanium on U.S. gross domestic product (GDP). The results indicated that a complete restriction of China’s net exports of gallium and germanium could cause the U.S. GDP to decrease by $3.1 billion (with lower and upper estimates of $1.7 billion to $8.2 billion) and $0.4 billion ($0.01 billion to $1.1 billion), respectively, if disrupted separately, and $3.4 billion ($1.7 billion to $9.0 billion) if disrupted simultaneously. The proposed model can be applied to other commodities and disruption scenarios.

Abstract

China’s export controls on gallium and germanium exemplify concerns regarding the reliability of supplies of mineral commodities that are essential to economic development, national security, and transition to renewable energy. This report presents a new model that quantifies the potential effects of mineral commodity supply disruptions on the U.S. economy. After calculating postdisruption equilibrium prices and quantities, a nonlinear optimization routine was used along with economic input-output tables to estimate the effects of varying Chinese net export restrictions of gallium and germanium on U.S. gross domestic product (GDP). The results indicated that a complete restriction of China’s net exports of gallium and germanium could cause the U.S. GDP to decrease by $3.1 billion (with lower and upper estimates of $1.7 billion to $8.2 billion) and $0.4 billion ($0.01 billion to $1.1 billion), respectively, if disrupted separately, and $3.4 billion ($1.7 billion to $9.0 billion) if disrupted simultaneously. The proposed model can be applied to other commodities and disruption scenarios.

Suggested Citation

Nassar, N.T., Shojaeddini, E., Alonso, E., Jaskula, B., and Tolcin, A., 2024, Quantifying potential effects of China’s gallium and germanium export restrictions on the U.S. economy: U.S. Geological Survey Open-File Report 2024–1057, 66 p., https://doi.org/10.3133/ofr20241057.

ISSN: 2331-1258 (online)

Table of Contents

  • Acknowledgments
  • Abstract
  • Significance Statement
  • Introduction
  • Background on Gallium and Germanium
  • Materials and Methods
  • Results and Discussion
  • Limitations and Applicability
  • References Cited
  • Appendix 1. Supplemental Information for Quantifying Potential Effects of China’s Gallium and Germanium Export Restrictions on the U.S. Economy
Publication type Report
Publication Subtype USGS Numbered Series
Title Quantifying potential effects of China’s gallium and germanium export restrictions on the U.S. economy
Series title Open-File Report
Series number 2024-1057
DOI 10.3133/ofr20241057
Year Published 2024
Language English
Publisher U.S. Geological Survey
Publisher location Reston, VA
Contributing office(s) National Minerals Information Center
Description vi, 66 p.
Online Only (Y/N) Y
Additional Online Files (Y/N) N
Google Analytic Metrics Metrics page
Additional publication details