US sets the stage for duties on battery materials from China

[NEW YORK] The US Commerce Department set the stage for anti-subsidy duties on imports of key battery components from China, after concluding materials had been unfairly subsidised.

The agency’s preliminary determination is an early milestone in a trade case looking at supplies of active anode material, which is key to batteries for electric vehicles (EVs) and include materials such as graphite and silicon.

US graphite producers were among the petitioners that asked for investigations into whether China’s massive state subsidies are artificially lowering prices and making it harder for them to compete. A sharp tariff increase would raise the cost of US-made EVs at a time when a Republican tax plan would eliminate consumer credits on the vehicles.

The preliminary duties announced on Tuesday (May 20) by the Commerce Department are meant to counter subsidisation of the material, though a separate probe of alleged unfair pricing is also underway.

Final decisions are expected later this year in the trade cases, which are separate from US President Donald Trump’s widespread tariffs on all trading partners as well as planned levies on semiconductors, pharmaceuticals and other goods.

The Commerce Department found that Chinese producers are benefiting from subsidies worth as much as 721 per cent.

China produces most of the world’s graphite. The US relies on China for 59 per cent of its natural graphite imports and 68 per cent of artificial graphite, according to Capstone. BLOOMBERG