1. Tariffs on battery parts will increase from 7.5% to 25% in 2024, along with tariffs on natural graphite and permanent magnets in 2026, and certain critical minerals in 2024.
2. The White House is implementing these measures to protect American workers and businesses from China’s unfair trade practices. Other industry products such as solar cells, EVs, cranes, and medical equipment will also see tariff increases.
3. China dominates the global lithium-ion battery market, with 80-90% of manufacturing. The Inflation Reduction Act aims to boost US battery manufacturing projects, especially for EVs, with an additional 25% tariff on Chinese batteries to protect US industry competitiveness.
The White House has announced an increase in tariffs on battery parts, natural graphite, permanent magnets, and certain critical minerals from China in an effort to protect American workers and businesses from unfair trade practices. This is part of a series of measures that also includes hiking tariffs on solar cells, electric vehicles, and other industry products. China dominates the global lithium-ion battery market, making the tariffs a significant move to protect US industries.
The tariffs have been in place since 2018, but are being increased under President Biden’s direction to protect American interests. The tariffs go hand-in-hand with Biden’s Inflation Reduction Act, which provides tax credit subsidies and funding for clean energy industries. The new tariffs provide an additional reason for US manufacturers to source locally-made components to protect themselves from the higher costs of Chinese products.
The Inflation Reduction Act has spurred a boom in US battery manufacturing projects, particularly for electric vehicles. The increase in tariffs will impact non-EV batteries two years later, giving BESS manufacturers time to source US-made cells and take advantage of domestic content tax credits. The move is seen as a way to level the playing field for US manufacturers against China’s artificially low-priced exports.