China proposes export ban on LFP battery components as U.S. mulls import tariffs, DoD blacklists CATL

china solar module cell imports tariff

The trade battle over battery components is ramping up fast – China is proposing restrictions on exports related to lithium-ion battery processing, and a petition has been filed for the United States to consider import tariffs on other battery-related components.

UPDATE: Then, on Monday, the U.S. Defense Department added Chinese battery maker CATL to a list of companies it alleges works with the Chinese military. CATL is most known for being Tesla’s battery supplier, but other standalone energy storage systems source CATL batteries too.

China proposes export restrictions

China’s Ministry of Commerce already has proposed export restrictions on battery processing technology and critical minerals lithium and gallium. The ministry then added battery cathode technology to its list of controlled exports.

China currently has 70% of the market for the global processing of lithium into the material needed to make electric vehicle (EV) batteries, according to Adam Webb, head of battery raw materials at consultancy Benchmark Mineral Intelligence.

 “Depending on the level of export restrictions imposed, this could pose challenges for Western lithium producers hoping to use Chinese technology to produce lithium chemicals.”

These restrictions could also negatively impact Chinese battery players such as CATL and BYD as they eye overseas expansion plans.

Petition filed for anode import tariffs

Meanwhile, the American Active Anode Material Producers (AAAMP) filed anti-dumping and countervailing duty petitions with the Department of Commerce and International Trade Commission (ITC) against imports of active anode material (AAM) from China – that is natural and synthetic graphite used in lithium-ion battery anodes. The petitions allege average dumping margins from 828% to 921%.

China is in a dominant position here, just as they are in the cathodes (and PV component supply), with roughly 95% market share of battery grade graphite. The AAAMP is made up of graphite producers in the United States and Canada.

An affirmative finding would certainly impact EVs and stationary battery energy storage suppliers, as well as any developer or installation company buying a lot of batteries.

“We believe this case could have a wide range of impacts as the petition covers active anode material regardless of whether it is imported independently, as part of a compound, or in a battery,” surmised Roth Capital in an industry note.  “We believe the anode typically represents ~10-15% of the cost of a battery, or ~$15/kWh for a DC block priced at $120/kWh.”

Tack on a 900% tariff, and the incremental cost could be ~$135/kWh, representing a ~125% increase in the DC-block to ~$255/kWh.

Expect a final determination toward the end of 2025.  

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