What does the 90-day reduction in US-China tariffs mean for the BESS industry? We hear from industry analysts while also discussing the topic with CATL and fellow China-based battery OEM Rept Battero.
The US and China agreed on Monday (12 May) to reduce their huge respective tariffs, with the US reducing its broad tariff from 145% to 30% and China reducing its reciprocal one from 125% to 10%.
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Taking into account battery-specific tariffs, the move temporarily reduces the combined duty on Chinese battery energy storage systems (BESS) or batteries for BESS from 155.9% to 40.9% right now, rising to 58.4% in 1 January 2026 when a higher Section 301 tariff kicks in (assuming the current tariff level remains).
At 155.9%, the US BESS market was essentially ‘frozen’, sources told Energy-Storage.news. System integrator Fluence saw a 30% revenue fall in the first quarter of 2025 partially as a result.
The share prices of Fluence, Tesla and another US-listed system integrator Stem Inc were boosted by 5-10% in reaction to the news, while global stock and commodity indexes also jumped.
Tariff pause a ‘welcome reprieve’
“The 90 day pause on China tariffs will bring some reprieve to the US BESS market at a time of significant uncertainty,” said Iola Hughes, head of research for Rho Motion, part of market intelligence firm Benchmark Minerals.
“While a positive step, the industry will still face higher prices across all elements of the supply chain from procuring manufacturing equipment to cathode, anode, cell and system at a time where the market is still heavily reliant on China.”
Hughes told Energy-Storage.news that amongst other uncertainty around an AD/CVD case and the future of the Investment Tax Credit (ITC), further stockpiling of batteries and BESS may ensue during this period.
“However, domestic and Chinese players alike will be encouraged by the reduction whilst still remaining focused on building a non-Chinese supply chain by accelerating domestic and southeast Asian production,” she added.
Rho Motion recently forecasted a 12% demand reduction over 2025-2028 even taking into account some tariff relief.
‘Limited window of opportunity’
Others posting on LinkedIn, who were from companies dependent on US-China trade to pick back up, echoed this sentiment.
“The 90-day pause on tariff increases is a limited window of opportunity—now is the time to act,” said Jacob Taari, business development for Gridvest, a distributor and financier of battery storage systems for commercial and industrial scale systems (up to 40MWh).
“Now, with the announcement of a 90-day goodwill period between China and the US, we are even more optimistic about our upcoming shipments and pending projects,” posted Kelvin Hu, international sales director for SPEO, a material handling solutions provider serving ports, docks, and industrial facilities.
However, note that stockpiling of batteries and BESS cannot be done in the same way as for solar, as battery degradation starts at the point of manufacture, not at the point of commercial operation.
‘Uncertainty is devastating’: the chump vs sucker scenario
Daniel Finn-Foley, director of energy storage market intelligence for advisors Clean Energy Associates (CEA) offered a different view.
Also posting on LinkedIn, he said: “The tariff pause is not a starting gun – it’s a false start. No one wants to be the chump who imported from China at 30% when, for all we know, the rate may be 0% in three months. Likewise, no one wants to be the sucker who didn’t import at 30% when the rate jumps to 54% or more in three months, or sooner. The result? Paralysis.”
“For the energy storage industry, where projects have long lead times and purchasing decisions are made well in advance of commissioning, the uncertainty is devastating. Domestic production simply cannot keep up with demand, and developers and integrators are left to pick up the pieces, such as they are.”
CATL sanguine on impact
Energy-Storage.news discussed the topic of US-China tariffs with leading Chinese vertically-integrated battery and BESS manufacturers CATL and Rept Battero at last week’s ees Europe trade show in Munich, Germany.
As such, the discussions pre-dated Monday’s news of a 90-day pause on the sky-high tariffs, but their comments offer an insight into the companies’ views of what is happening.
Ji Yu, senior director project management for ESS CATL, told Energy-Storage.news during a Q&A that the reaction from its US customers to the high tariffs was mixed.
“From my point of view, the demands for renewable power and storage are there, the tariff change in the short-term impacts immediate projects, our customers are waiting to see if things settle down,” Yu said.
We are working through ways to support them and provide different options. Some want to wait to see if there is an agreement. In US, we have options for local production and we have three plants here in Europe.
“We can supply some from Indonesia, and in future, maybe from Europe, it’s possible. It really depends on the business case and the regulations. We have several options.”
In 2024, 30.5% of CATL’s revenue was generated from overseas markets, of which a large (but undisclosed) chunk will be the US.
Note that it also saw falling ESS revenue in the first quarter of 2025, falling by 15.3% year-on-year RMB11.5 billion (US$1.6 billion). However, it attributed this to ‘reduction in our average selling price of ESS batteries in response to decrease in the prices of raw materials, including lithium carbonate, despite continuous sales volume increase’.
Rept Battero: our US exposure is low
Also speaking to Energy-Storage.news in-person at ees Europe, Rept Battero’s chairman and CEO Dr Cao Hui said that the company’s US exposure is low enough to limit the impact of tariffs.
“Only 5-6% of our products are shipped to the US so the effect on Rept is limited. We heard from the news that most projects (ESS) in the US have been suspended because of tariffs. Each project has a budget, and more than 95% of batteries come from China. It’s hard for the clients to increase the budget. The governments are talking and we are waiting for the updates as well.”
“We need to develop customers elsewhere, Europe, Australia, Middle East – as solar is becoming more and more popular in these places and they need ESS for grid stability. For Rept this year our sales revenue will be double compared to last year.”
“If a company has more exposure to the US then it’s worse, but for us it’s okay.”
The firm has a factory in Indonesia which may also allow it to mitigate the effects of US tariffs on Chinese goods.
“We decided to have an Indonesia factory way before Trump’s tariffs as we want to be globalised. We want to satisfy the global requirement for our products,” Hui added.
