The impact on electric vehicles has raised concerns in multiple countries, and the U.S. will impose heavy taxes on CHINA GRAPHITE, causing American companies to complain
The impact on electric vehicles has raised concerns in multiple countries, and the U.S. will impose heavy taxes on CHINA GRAPHITE, causing American companies to complain
According to Reuters, on July 17 local time, the U.S. Department of Commerce determined that imports of graphite from China are subject to unfair subsidies and will impose a preliminary anti-dumping duty of 93.5% on imported anode-grade graphite from China, with a final decision to be announced by December 5.
In response, Chinese Foreign Ministry spokesperson Lin Jian stated on July 18 that the essence of China-U.S. economic and trade cooperation is mutual benefit and win-win outcomes, and expressed hope that the U.S. side will earnestly adhere to market economy rules and maintain the healthy and stable development of China-U.S. economic and trade relations.
Graphite is a key material for battery manufacturing. Bloomberg noted that in December last year, the industry association representing U.S. graphite producers, the American Active Anode Material Producers Association (AAAMP), submitted a petition to two federal agencies requesting an investigation into whether Chinese companies violated anti-dumping laws. According to AAAMP, the new tariffs will be added on top of existing rates, bringing the effective tariff to 160%.
A fact sheet obtained by Reuters from the U.S. Department of Commerce shows that a uniform anti-dumping tax rate and cash deposit rate of 93.5% will apply to all Chinese producers. This policy involves imported products valued at $347.1 million in 2023 and applies to anode-grade graphite materials with a carbon content by weight of no less than 90%, including synthetic graphite, natural graphite, or a mixture of both.
Previously, on May 20, the U.S. Department of Commerce had preliminarily ruled in another parallel countervailing investigation into Chinese anode-grade graphite materials that two Chinese companies did not fully cooperate with the investigation, inferring a subsidy rate exceeding 700% based on "adverse inference facts," while other Chinese companies had a subsidy rate of 6.55%.
Bloomberg reported that the imposition of tariffs on graphite will further exacerbate the tension in the global electric vehicle supply chain. Sam Adham, head of battery materials at consulting firm CRU Group, stated that the tariffs will hit manufacturers hard, with a 160% tariff translating to an average increase of $7 per kilowatt-hour in electric vehicle battery costs, equivalent to 20% of the manufacturing tax credit stipulated in the Inflation Reduction Act, which was retained in President Trump's budget proposal. Adham said, "This essentially wipes out all profits for Korean battery manufacturers for one or two quarters."
According to the Korea Herald, Chinese companies supply over 90% of the world's graphite, and graphite accounts for about 95% of the anode materials in electric vehicles, with battery anodes making up about 7% of the total battery cost.
The new tariffs may lead to an increase of about $1,000 in the price of batteries produced in the U.S., thereby raising the prices of electric vehicles. "The uncertainty brought about by this policy change puts greater pressure on Korean battery manufacturers who are ramping up production in the U.S. to qualify for incentives such as the Inflation Reduction Act and advanced manufacturing production tax credits," the report stated.
Tesla and its key battery supplier, Japan's Panasonic, have attempted to block the imposition of new tariffs, arguing that they rely on imported graphite from China because the domestic graphite industry in the U.S. is not developed enough to meet the quality standards and quantity requirements of automakers According to data from Bloomberg New Energy Finance, the United States imported nearly 180,000 tons of graphite products last year, with about two-thirds coming from China. China dominates in graphite processing capacity. A report from the International Energy Agency in May stated that graphite is one of the materials most susceptible to potential supply risks, and "urgent efforts are needed to diversify."
Mo Ke, chief analyst at the Chinese research institution Zhenli Research, stated in an interview with the Global Times on the 18th that the main goal of the United States is to develop its domestic graphite manufacturing industry. Graphite products are primarily used in the electrolytic aluminum industry and steelmaking, which together account for the vast majority of graphite usage, while the demand for graphite in the lithium battery sector is comparatively much smaller. Now, in the context of the China-U.S. trade dispute, graphite has become, to some extent, China's "trump card," just as the U.S. uses chips to "choke" China. Therefore, the U.S. government is attempting to stimulate the recovery of its domestic graphite manufacturing industry.
Liang Huaixin, a researcher at the National Security and Governance Research Institute of the University of International Business and Economics, told the Global Times on the 18th that this period is an important window, and the overall trend of China-U.S. bilateral economic and trade relations, as well as negotiations between the U.S. government and relevant U.S. enterprises, will affect whether this measure can ultimately be implemented. In particular, the recent tax increase will severely impact the normal operations of domestic new energy companies in the U.S., reflecting the relatively tense relationship between the U.S. government and large companies like Tesla.
Liang Huaixin believes that if the policy is ultimately implemented, Chinese companies will need to make adjustments in their operations, especially in finding alternative export markets. For the U.S., the short-term impact will be on its supply chain, potentially leading to delays in the delivery of related supporting products. If, in the long term, it has to seek third-party alternative products, achieving "seamless replacement" will undoubtedly increase upstream costs for U.S. companies.
Global Times, original title: "Impact on Electric Vehicles Raises Concerns in Multiple Countries, U.S. to Impose Heavy Taxes on Chinese Graphite, Causing Complaints from U.S. Companies"
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