North American graphite miners are making a bold move to break China’s stronghold on a key material used in electric vehicle batteries. These miners are lobbying the US government to impose a 25% tariff on three graphite products sourced from China, a decision that could potentially escalate tensions with Beijing.
The U.S. government is expected to make a decision in May on whether to include graphite in the list of minerals subject to the higher Section 301 tariff. This tariff was put in place by former President Donald Trump to counter China’s “unreasonable and discriminatory” practices related to technology and innovation.
Graphite is a critical material used to make electric battery anodes, and with China controlling 70% of global output, North American graphite miners are feeling the pressure. They argue that allowing cheap Chinese graphite to flow into the market undermines their ability to raise capital from automakers through offtake agreements.
On the other hand, the OEM lobby group opposes the higher tariff, claiming that without a credible North American supply chain, they are forced to rely on China for graphite. This poses a challenge for them to compete against Chinese automakers.
The United States Trade Representative is yet to respond to queries regarding the inclusion of China-sourced graphite in the tariff list. However, North American graphite miners are adamant that trade protections are necessary to counter China’s dominance in the global graphite market.
As western countries strive to reduce their dependence on China for critical minerals like graphite, this lobbying effort by North American miners highlights the growing tensions in the global electric vehicle supply chain. The outcome of the U.S. government’s decision in May will have far-reaching implications for the future of the electric vehicle industry.
