The U.S. Commerce Department said it will impose preliminary anti-dumping duties of 93.5% on anode-grade graphite imported from China after concluding that the materials, which are a key component for electric vehicle batteries, are being sold in the U.S. at less than fair market value. The order affects imports valued at USD347.1 million in 2023. The duties apply material with a graphite minimum purity of 90% carbon by weight, and can be synthetic graphite, natural graphite or a blend of the two. A separate but parallel anti-subsidy investigation into Chinese anode grade graphite materials by the Commerce Department on May 20 resulted in a preliminary countervailing duty of 6.55% for most producers but 712.03% for Huzhou Kaijin New Energy Technology Corp and 721.03% for Shanghai Shaosheng Knitted Sweat. Final anti-dumping and anti-subsidy duties for the material are due by December 5, 2025.
The American Active Anode Material Producers, a trade association representing U.S. graphite producers, filed petitions in December 2024 with two federal agencies, asking for investigations into whether Chinese companies were violating anti-dumping laws. The new duties will add to existing rates, increasing the effective tariff to 160%, according to the trade group that filed the complaint. The anti-dumping duty on graphite is set to increase tensions along the global electric-vehicle supply chain that is already facing Chinese export controls of some critical minerals and battery technology. It could also impose significantly higher costs on carmakers, who rely on the material to make electric vehicles.
The tariff would be a blow to battery manufacturers, said Sam Adham, head of battery materials at consultancy CRU Group. A 160% tariff equates to an added cost of USD7 per kilowatt-hour to an average EV battery cell, or one fifth of the battery manufacturing tax credits in the Inflation Reduction Act. “That basically wipes out profits for one or two entire quarters for the Korean battery makers,” Adham said. Tesla and its key battery supplier, Japan’s Panasonic, were among companies pushing to block the new tariffs, arguing that they rely on Chinese graphite imports because the domestic industry has not developed enough to meet the quality standards and volume that the carmaker requires.
Nearly 180,000 tons of graphite products were imported into the U.S. last year, with about two-thirds of these deliveries coming from China, according to BloombergNEF. China dominates the processing capacity of graphite, with the International Energy Agency (IEA) calling the material one of the most exposed to potential supply risks and “requiring urgent efforts for diversification”, according to a report in May. Graphite is expected to remain the most common anode material for all types of lithium-ion batteries in the medium term, according to the IEA, with silicon only expected to begin eating into its market share from 2030, the South China Morning Post reports.
