The Biden administration has issued a sweeping tariff on battery-grade graphite imported from China, stirring debate across both the auto and energy sectors.
The move arrives amid an urgent US push to reduce its reliance on Chinese materials critical to electric vehicle production.
Battery manufacturers and domestic suppliers are now assessing the ripple effects following Thursday’s announcement.
The new duties may spark shifts in sourcing and prompt changes throughout the battery supply chain.
New Tariffs Target Chinese Battery Graphite
On Thursday, the US Commerce Department announced preliminary anti-dumping tariffs of 93.5% on Chinese-made graphite, specifically the type used in batteries for electric vehicles and energy storage.
This is in addition to earlier countervailing duties already imposed on Chinese graphite for alleged unfair government subsidies.
The new order stems from a complaint filed by the American Active Anode Material Producers, a coalition that includes American and Canadian companies seeking to compete more effectively with China.
The total US tariff rate on some graphite imports from China now exceeds 160% when duties are stacked, a dramatic escalation in the ongoing US-China trade conflict.
Did you know?
China controls over 60% of global graphite supply and refines nearly 90% of the world’s battery-grade graphite.
Background: Trade Conflict Moves to Battery Materials
The battery-grade graphite targeted by these tariffs is an essential component in lithium-ion batteries, making it crucial for electric cars, smartphones, and large-scale energy storage.
Amid a broader trade standoff between Washington and Beijing, the action underscores the US determination to shield key supply chains.
The Commerce Department’s decision follows a multi-month investigation. Officials found Chinese graphite manufacturers were selling below fair market value, benefiting from government subsidies.
US imports of active anode material from China reached $347 million last year alone.
Industry Reactions: Mixed Responses to Tariff Surge
Leading US battery material groups praised the decision as a major win for domestic producers. Jon Jacobs, Chief Commercial Officer at Westwater Resources, called it a significant step in leveling the playing field for US companies.
Not all reactions have been supportive. Some electric vehicle manufacturers, including Tesla and tech supplier Panasonic, expressed concern that higher graphite prices will translate into higher battery prices.
Critics also note that sudden increases in input costs could slow the pace of clean energy adoption.
Supply Chain Impacts: Key Players and Projected Shifts
China dominates graphite processing, accounting for nearly 90% of global battery-grade supply. Market analysts warn that such abrupt changes could prompt American importers and electric vehicle makers to seek new suppliers, including in Canada, Australia, and emerging US projects.
Market analysts warn that such abrupt changes could disrupt supply chains and delay manufacturing schedules.
For upstream companies, the tariffs offer a potential boost. Firms like Syrah Technologies and NOVONIX are now looking to ramp up US-based graphite production to meet anticipated shifts in demand.
ALSO READ | Imported Goods Drive CPI Surge: Fed Faces New Inflation Headache!
Policy Goals and Geopolitical Tensions
The new US policy is part of a broader effort to reduce reliance on Chinese imports of minerals and components vital to the clean energy transition.
Previous actions included Section 301 tariffs of 25% on many Chinese products, and more recently, additional countervailing duties topping 700% on some graphite imports.
Industry groups argue that safeguarding domestic producers is essential for national security and modern supply chain resilience.
However, international observers warn that mounting tariffs further inflame tensions with China and may invite retaliatory trade measures.
Looking Ahead: Uncertainties and Industry Adjustments
A final ruling from the Commerce Department is due by December 5, 2025, meaning companies and markets will face several months of uncertainty.
EV buyers and large-scale battery projects will watch closely for potential price impacts and changes in supply availability.
As the US leans into tariffs to drive domestic battery material production, questions remain about long-term competitiveness and the feasibility of rapidly scaling American supply.
Most industry leaders agree that the outcome of the tariff dispute will shape the future of both energy and automotive manufacturing in the years ahead.
Comments (0)
Please sign in to leave a comment