The rhetoric around new and increased trade barriers between the US and China affecting batteries, battery materials and battery energy storage systems (BESS) has ramped up in the past few weeks, and we hear from a lawyer and a political analyst.
The American Active Anode Material Producers (AAAMP) filed a new AD/CVD petition against imports of active anode material from China on 18 December, 2024, representing another way the US may limit battery products from China alongside Section 301 tariffs and the Uyghur Forced Labor Prevention Act (ULFPA). At the same time, the Ministry of Commerce of China has proposed banning the export of some battery materials.
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Tariffs and ULFPA
Batteries from China are soon going to be subject to a tariff of around 28.4%, mainly comprised of an increased 25% Section 301 tariff which came into force on 1 January, 2025 for electric vehicles (EVs) and will come in from 2026 for battery energy storage system (BESS) batteries.
Donald Trump, who takes office as President for the second time in less than a fortnight, has threatened to add another 10% to that, though for now, it’s only a threat.
ULFPA meanwhile, which bans products which are alleged to be made using forced labour in the northern Xinjiang region of China, has not yet been used for battery or BESS imports but consultancy Clean Energy Associates explored how it might be in a guest blog published yesterday. ULFPA has been used in solar, as covered by our colleagues at PV Tech regularly.
AD/CVD used for battery materials for the first time
Another avenue for restricting battery imports from China is the AD/CVD – Antidumping and Countervailing Duties – route, used under international trade rules to apply tariffs to imports which are alleged to be priced artificially low, negatively affecting domestic industries. As with ULFPA, AD/CVD has been applied frequently in US solar.
Nithya Nagarajan, a partner at law firm Husch Blackwell on its international trade & supply chain team, told Energy-Storage.news that previous AD/CVD cases in the battery industry have focused on finished EV products. This appears to be the first to apply to battery materials and batteries directly.
The cathodes of lithium-ion batteries can be made with a range of different metals and materials, while anodes are virtually all made primarily with natural or synthetic graphite, and China has a near-monopoly on this type of product.
The AAAMP trade body is suggesting an AD tariff of 828% to 921% on active anode material imported from China into the US, including on anode material which is contained in finished battery modules.
The AD tariff would normally be calculated as the difference between how much a producer sells its products for in its home country and how much lower it sells them for in the petitioner’s country. In the case of non-market economies like China, however, surrogate values are used to create a ‘proxy comparison price’, Nagarajan explained.
Analysts have estimated that, if successful, that AD tariff on active anode materials would roughly double the price of batteries imported from China, with active anode materials typically making up 10-15% of a battery’s cost.
The US is investing billions into its own US battery manufacturing industry but its active anode material industry is virtually non-existent today. Yesterday, one of the petitioners, Novonix, announced intentions to purchase a site for a synthetic graphite mass production plant in Tennessee.
“This is a nascent industry in the US, so this case looks like a pre-emptive strike,” Nagarajan said.
The first hearing on the case at the International Trade Commission (ITC) is this week. Nagarajan said a decision is expected in late summer 2025 or early 2026, but a clearer picture of the case should emerge by summer.
Scope of petition ‘frankly a stretch’
Both Nagarajan and a political analyst, speaking anonymously, said that the fact the petition includes active anode material inside of battery product, rather than just the material as a standalone product, could work against it.
“That’s frankly a lot of stretch in terms of the scope, and I’m wondering if this case won’t either fail or if Commerce Department won’t pare back that scope,” the analyst said.
“Keep in mind that a recent aluminum extrusions AD/CVD case with an extremely broad scope failed at the International Trade Commission because the lawyers weren’t able to prove injury.”
Nagarajan added: “Batteries being covered if they contain this material adds an impracticality around tracing it, as it will need to be detailed in commercial invoices. That will be an issue for US Customs.”
China proposes restricting exports of battery technologies
In highly related news, the Ministry of Commerce of China has proposed restricting the exports of some battery and lithium processing related technologies, according to local reports.
The products listed in the proposal – ‘Notice on Adjustments to the Public Consultation for the Catalogue of Technologies Prohibited or Restricted from Exporting from China’ – include battery cathode material preparation technologies and metal smelting and rolling technologies.
The product list appears to primarily target the ‘inputs’ that the battery and battery manufacturing industry requires:
- Lithium Iron Phosphate (LFP) battery material preparation technology
- Lithium Manganese Iron Phosphate (LMFP) battery material preparation technology
- Phosphate-Based Cathode Precursor Preparation Technology
- Spodumene-Based Lithium Extraction for Lithium Carbonate Production
- Spodumene-Based Lithium Extraction for Lithium Hydroxide Production
- Metallic Lithium and Lithium Alloy Preparation Technology
- Direct Lithium Extraction from Brines
- Preparation of Purified Lithium Solutions
Trump team considering ‘global’ tariffs on batteries
Just before Christmas, Reuters reported that Trump and his team are considering a swathe of measures to cut off support for EVs and charging and increase restrictions on cars, components and battery materials from China using Section 232 tariffs. Section 232 tariffs are used for products that are a national security concern.
Commenting on business networking site LinkedIn, CEA’s senior policy analyst Christian Roselund said: “While this will be wrapped in “America First” language, autarky (self-sufficiency) is a recipe for backwardness. The ultimate result of these policies would be for the United States to fall further behind in the energy and transportation technologies of the 21st century – as well as locking in petroleum use and emissions for longer.”
