Mongolia will deepen cooperation with Washington to mine rare earths, the country’s Prime Minister L.Oyun-Erdene said on a visit to Washington on Wednesday, but he warned that a “new Cold War” between the U.S. and China would harm the global economy.

Mongolia has extensive deposits of rare earths and copper, which are vital for high tech applications including defense equipment and for President Joe Biden’s efforts to electrify the auto market to help stave off climate change.

China on Tuesday officially implemented its export regulations on gallium and germanium-related products, a decision that many consider a retaliation for restrictions imposed on the Chinese semiconductor sector by the U.S., Japan, and the Netherlands in the recent quarters.

Starting August 1, 2023, Chinese companies must obtain an export license to export gallium and germanium metals, as well as any products containing these elements. According to various researchers, China controls 94% or more of the global gallium production and around 60% of the global germanium output. The new export rules could potentially impact Japan’s chipmaking industry, which relies on China for 40% of its supply, according to Nikkei.

The announcement of the curbs in early July caused a surge in gallium prices by nearly 20% in the U.S. and Europe. This new rule is said to be implemented in the interest of China’s national security but is considered a response to restrictions against the Chinese high-tech industry.