Li-Ion Batteries: How US Firms Want To Counter Chinese Dominance

Li-Ion Batteries: How US Firms Want To Counter Chinese Dominance

The American Active Anode Material Producers (AAAMP), an American graphite producers coalition, recently submitted a petition to the United States (US) Commerce Department  (Commerce) and International Trade Commission (ITC). The petition aims to initiate a trade investigation and impose tariffs as high as 920% on imports of natural and synthetic graphite from China used to make lithium-ion battery anode material. 

“AAAMP is filing this case to help protect the North American graphite industry, which is at risk of being smothered by China’s malicious trade practices. There is overwhelming evidence that China dumps artificially cheap graphite into global markets, which is made possible by state-sponsored policies and massive subsidies,” said AAAMP spokesperson Erik Olson.

“Without trade relief from the U.S. government, the domestic graphite industry is in peril. China’s anticompetitive actions make it challenging for graphite producers to find secure financial footing, which prevents them from becoming established players in the global market.” 

Tariff On Graphite 

While most graphite from China is currently subject to 25% tariffs, that duty is far too low. Experts at Buchanan Ingersoll & Rooney PC, the law firm handling the case, estimate dumping margins as high as 920%, allowing China to absorb the additional 25% cost easily. Fueled by state-sponsored industrial policies, low or no wage protections, and lack of environmental stewardship, recent data shows China’s overcapacity in the battery industry has quadrupled demand. 

The glut of Chinese battery materials has roiled markets and significantly impacted prices. China’s ability to overproduce goods is part of a concerted strategy made possible by massive subsidies and other financial incentives provided to companies by the Chinese government. The investigation is under the jurisdiction of U.S. antidumping and countervailing duty (AD/CVD) statutes and will proceed simultaneously before Commerce and the ITC (an independent federal agency). Commerce will determine if the graphite is being sold at less than fair value (“dumped”) and if the Chinese government is subsidizing its production. Separately, the ITC will determine if the U.S. industry has been materially injured, or alternatively, whether the establishment of the domestic industry has been materially retarded by the unfairly priced imports. If both the Commerce and ITC investigations prove conclusive, Commerce can assess additional tariffs equal to the extent of unfair pricing by the Chinese. Experts have calculated appropriate anti-dumping tariffs on graphite from China should be as high as 920%