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China announced plans Friday to limit exports of graphite, a mineral that is crucial for the production of batteries used in electric vehicles.
The announcement comes just days afterthe United Statesimposedadditional limitationson the types of semiconductorsthat American companies are allowed to sell to Chinese firm.
China, the country that dominates graphite production and processing in the world, has announced that export permits for both natural flake and synthetic graphite will be required starting December.
"At this moment, both China and Western nations are involved in a tit-for-tat. This shows how protectionist policies often spread." Newton's third rule that every action has a reaction is also applicable here, said Stefan Legge. He is the head of research on tax and trade policies at the University of St Gallen, Switzerland.
He added: 'At same time, both parties of the dispute realize that it's costly if geopolitics overrides economics.
The Institute for Energy Research in Washington, DC, a research organization, said carmakers were trying to lock-insupplies of graphite outside of China as the demand for EV battery outpaced other uses for this material.
According to the International Energy Agency, global sales of EVs are soaring. This includes both pure battery-powered cars and hybrids.
It is expected that sales will rise to 14 million cars this year.
US Geological Survey reports that the global market for graphite in batteries has grown by 250% since 2018. China was the leading graphite manufacturer in 2018, accounting for 65% of the global production.