The First Shot of the Year: U.S. Tariffs on Chinese Batteries to Rise to Nearly 40%! "Korean Companies Ecstatic!"

Recently, US President Donald Trump signed an executive order to raise a 10% tariff on goods imported from China, stating that this aligns with the "protectionist measures" he supports.

Additionally, according to CCTV News, Trump also signed a tariff order on the same day, imposing an additional 25% tariff on imports from Canada and Mexico, and a 10% tariff on energy resources from Canada. The White House stated that if retaliatory tariffs are imposed on the US, the US may further increase tariff rates.

Battery Network noted that this latest US tariff hike will raise the total tariff on batteries from China to nearly 40%, potentially indirectly accelerating the rapid growth of South Korean battery companies' businesses in the US.

The Trump administration stated that this tariff adjustment is based on the International Emergency Economic Powers Act (IEEPA) and aims to address national emergencies within the US, particularly by restricting the import of chemicals used to manufacture fentanyl. Furthermore, the measures targeting China are broader, including "combating China's intellectual property theft, forced technology transfers, and other unfair trade practices."

According to estimates, the US currently imposes a 3.4% base tariff on Chinese battery products and plans to apply a 25% Section 301 tariff on energy storage systems by 2026 (a rate already applied to power batteries). Under the new policy, the cumulative tariff on Chinese batteries will reach 38.4%.

Recently, research institutions EVTank and the Yiwei Economic Research Institute, in collaboration with the China Battery Industry Research Institute, jointly released the "White Paper on the Development of China's Lithium-Ion Battery Industry (2025)." The data shows that in 2024, global lithium-ion battery shipments will total 1,545.1 GWh, up 28.5% YoY.

In terms of shipment structure, the effect of China's trade-in policy in 2024 far exceeded expectations. However, economic weakness and inflation driven by interest rate hikes caused the EV market in Europe and the US to experience negative growth and single-digit growth, respectively. China continued to be the largest driver of global growth. With these combined effects, global EV LIB shipments reached 1,051.2 GWh, up 21.5% YoY. In the ESS sector, China's strong new energy policies, enhanced layouts by central and state-owned enterprises, and declining ESS costs drove ultra-high-speed growth. In the US, rigid ESS demand combined with ITC subsidies showed significant effects. Additionally, emerging markets saw multiple breakthroughs, with the UK, Saudi Arabia, and Australia signing several GWh-level orders in H2 2024. Global ESS LIB shipments reached 369.8 GWh, up 64.9% YoY.

According to BNEF data, global energy storage system prices in 2024 fell by 40% to $165/kWh, approximately 1.073 yuan/Wh, marking the largest drop since 2017. Turnkey system prices for all durations in the US and Europe were $236/kWh and $275/kWh, respectively, approximately 1.534 yuan/Wh and 1.787 yuan/Wh, which were 57% and 63% higher than China's $101/kWh (0.656 yuan/Wh).

In recent years, the global new energy industry has flourished. As a top performer, China has achieved significant technological innovation and holds a crucial position in the global market. However, with the rise of China's new energy industry, the US government has frequently imposed strict trade barriers on Chinese products, hoping to enhance the competitiveness of domestic producers by raising tariffs.

A week before Trump's announcement of the new tariffs, Samsung SDI disclosed its 2024 annual report, stating that US trade restrictions on China would boost demand for South Korean ESS batteries, creating opportunities for the company. Samsung SDI is also considering shifting some production lines at its South Korean factories from ternary batteries to LFP batteries for energy storage systems, potentially capturing market share lost by Chinese manufacturers affected by US trade policies.

Previously, LGES announced a similar adjustment plan, deciding to slow its EV battery expansion in the US and aiming for more "efficient" investments in the US, including exploring the conversion of EV battery capacity to ESS batteries.

Notably, in addition to battery products, the 10% tariff hike by the US also raised tariffs on Chinese PV products to 60%, including solar cells, silicon wafers, and polysilicon.

It is reported that in September 2024, the US officially imposed a 50% tariff on Chinese-made solar cells and modules under Section 301. Additionally, new tariffs on polysilicon and monocrystalline silicon wafers took effect on January 1, 2025.

Following the US government's decision to impose a 10% tariff on all Chinese goods exported to the US, China's Customs Tariff Commission of the State Council announced on the afternoon of February 4 that starting February 10, additional tariffs would be imposed on certain US-origin imports: 15% on coal and liquefied natural gas, and 10% on crude oil, agricultural machinery, large-displacement vehicles, and pickup trucks.

Furthermore, on February 4, China introduced other measures, including launching an antitrust investigation into Google by the State Administration for Market Regulation for alleged violations of the Anti-Monopoly Law of the People's Republic of China. The Ministry of Commerce and the General Administration of Customs announced export controls on tungsten, tellurium, bismuth, molybdenum, and indium-related items. The Unreliable Entity List Working Mechanism announced the inclusion of the US-based PVH Group and Illumina Inc. in the Unreliable Entity List.