The United States imports about $2 billion of lithium ion batteries from China each month. These batteries are used to power electric vehicles from Tesla, and from other major equipment manufacturers.
Washington officials and industry leaders hope to build an entire supply chain for these batteries in North America. But in order to do so, and protect our nascent industry from China's low pricing and manufacturing advantages, extremely high tariffs on each battery component are required.
For example, 28% of an EV battery is graphite, and China has near-monopolies on the refining and production of synthetic graphite. In order to create just the mines for domestic graphite, industry groups are pushing for a 920% tariff on Chinese graphite. Then further tariffs would be required to protect the refiners for raw graphite.
Then, similar tariffs would be enacted against Chinese lithium, nickel, cobalt, and the other key components of the battery.
These tariffs would so raise the cost of the batteries themselves, that demand for EV's in North America would fall to zero. This is already evident under the current tariff regimes in the US and EU, as the trade protections are driving up the retail costs of EV's, and destroying demand. The demand destruction leads to delayed rollouts of EV infrastructure, harming producers and consumers further.
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Bloomberg, China’s Battery Exports to US Jump to a Record $1.9 Billion
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Financial Post, US Graphite Firms Seek 920% Duty to Thwart China on EV Material
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Bloomberg, US Graphite Firms Seek 920% Duty to Thwart China on EV Material
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CBC, Quebec residents against graphite mine fear powering Pentagon, environmental ruin
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Mining, Environmentalists sue over US approval of ioneer’s Nevada lithium mine
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Inside Graphite One: A look at Alaska's largest graphite deposit
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Tribes protest lack of government consultation on graphite mine
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DOD Enters Agreement to Expand Capabilities for Domestic Graphite Mining and Processing for Large-Capacity Batteries
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Graphite One Announces Revised Cost-Share Agreement
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Graphite One Announces LIFE Financing and Concurrent Private Placement
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US graphite demand projected to surge more than 600% by 2034; Fastmarkets introduces regional price benchmark
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Company page, Northern Graphite
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Nikkei, Toyota's EV delay reveals price of protectionism against China
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Nikkei, Toyota to delay U.S. EV production to 2026 on slowing sales
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Closing scene, Hong Kong Island
