China Suspends Export Restrictions on Lithium-Ion
At the start of October, China took steps to restrict the export of materials and technology vital to the production of lithium-ion batteries to other countries. These restrictions were part of Announcement No. 58 and included everything from high-performance cells to the materials and technology needed to produce them.
It was announced as part of the China-U.S. Kuala Lumpur trade negotiations that these restrictions have been suspended for up to a year.
While retail investors saw the original restrictions as a blessing, it helped to rev up a rally that started in mid-September, pushing lithium-ion–related stocks to all-time highs, ironically these restrictions could have delayed or even halted progress for countries to onshore the manufacturing and refinement technologies needed to advance a domestic lithium-ion infrastructure.
The United States still has Section 301 tariffs on lithium-ion cells and components from China, covering a range of items such as cathode and anode materials, separators, electrolytes, battery packs, and individual cells.
These tariffs were first implemented during President Trump’s first term following a Section 301 investigation into China’s trade practices and were later expanded and modified during the Biden administration to include additional battery-related products.
They generally range from 7.5% to 25%, with electric vehicle batteries and complete battery packs at 25%, non-EV lithium-ion batteries set to rise to 25% by 2026, and key materials such as graphite, precursors, and related manufacturing equipment facing duties in the 10–25% range.
Additionally, recent announcements show that the U.S. Department of Commerce has found that Chinese-origin active anode materials, including graphite, are being dumped in the U.S. market and has imposed a preliminary anti-dumping tariff of 93.5% on those imports.
When combined with existing countervailing duties and other tariffs, the effective tariff rate can reach about 160% for many Chinese graphite imports.
The Trump Administration foresaw the need for critical materials from China in domestic production and included them in Annex II, which exempted the raw materials required for lithium-ion cell production and, with an edit in September, added lithium-ion cells themselves from reciprocal tariffs. To date, there has been no public announcement on whether the Section 301 tariffs will be eased or suspended as part of the Kuala Lumpur trade negotiations.