Quantifying potential effects of China’s gallium and germanium export restrictions on the U.S. economy
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.