【Tariffs】Up to 100%! The U.S. Announces Tariffs on Electric Vehicles, Lithium Batteries, and More!
【Tariffs】Up to 100%! The U.S. Announces Tariffs on Electric Vehicles,
Lithium Batteries, and More!
On May 14, U.S. time, the United States Trade Representative (USTR) released the four-year review report of the Section 301 investigation and issued a statement on the 301 tariff action against China. According to the tariff adjustment plan, the U.S. government has decided to impose tariffs on imports from China, including lithium batteries, electric vehicles, photovoltaic modules, natural graphite, steel, and aluminum materials.These tariffs will be implemented in phases over the next three years. Notably, the tariff on electric vehicles will rise to as high as 100%, while tariffs on power batteries and energy storage batteries will increase from the current 7.5% to 25%. To learn more info. on artificial graphite for anode materials.
According to the document, some goods will see immediate adjustments, such as the tariff on electric vehicles increasing from 25% to 100%, and the tariffs on power batteries and battery components rising from 7.5% to 25%. The tariffs on photovoltaic cells or modules will increase from 25% to 50%.
Other goods will have phased increases: for example, the tariffs on energy storage batteries and natural graphite will gradually rise to 25% by 2026, and semiconductor tariffs will increase from the current 25% to 50% by 2025.
Commentators believe that the increased tariffs on energy storage batteries will have minimal impact on costs, primarily due to higher manufacturing and labor costs in the U.S. Moreover, major U.S. energy storage system integrators like Tesla, Fluence, and Powin source their battery cells from Chinese companies. According to Woodmac's statistics, the average price of large storage systems in the U.S. in Q4 2023 was $1.03/Wh. Currently, the price of Chinese energy storage batteries is about RMB 0.4/Wh. Even if the tariff increases from 7.5% to 25%, the cost of the battery cells would only rise by RMB 0.1075/Wh.
On May 14, a spokesperson for China's Ministry of Commerce expressed firm opposition and solemn negotiations regarding the U.S. announcement of the four-year review results of the 301 tariffs.
The spokesperson stated that the U.S. is abusing the 301 tariff review process for domestic political purposes, further increasing the tariffs on some Chinese products. This politicizes and instrumentalizes economic and trade issues, which is a typical example of political manipulation. China is strongly dissatisfied with this action. The World Trade Organization (WTO) has long ruled that the 301 tariffs violate WTO rules. Instead of correcting the mistakes, the U.S. is persisting in its errors.
The spokesperson also mentioned that increasing the 301 tariffs violates President Biden's commitment not to seek to suppress or contain China's development or to decouple from China. This action also goes against the spirit of the consensus reached by the two countries' leaders and will severely impact the atmosphere of bilateral cooperation. The U.S. should immediately correct its erroneous actions and lift the tariffs on Chinese goods. China will take resolute measures to defend its interests. Follow us, keep abreast of the lithium battery market policy.
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