[SMM Analysis]The Impact of the U.S. Tariff Adjustments on the New Energy Terminals after the Geneva Talks

On May 12, the Ministry of Commerce website released the Joint Statement of the China-US Economic and Trade Talks in Geneva. China and the United States committed to taking the following measures by May 14, 2025:

The United States will:
(1) Modify the ad valorem tariffs imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and the Macao Special Administrative Region) as stipulated in Executive Order No. 14257 dated April 2, 2025. Among them, the 24% tariff will be suspended for an initial period of 90 days, while the remaining 10% tariff on these goods as stipulated in the Executive Order will be retained.
(2) Cancel the additional tariffs imposed on these goods according to Executive Order No. 14259 dated April 8, 2025 and Executive Order No. 14266 dated April 9, 2025.

China will:
(1) Correspondingly modify the ad valorem tariffs imposed on US goods as stipulated in the Announcement No. 4 of the Tariff Commission in 2025. Among them, the 24% tariff will be suspended for an initial period of 90 days, while the remaining 10% tariff on these goods will be retained, and cancel the additional tariffs imposed on these goods according to Announcement No. 5 and Announcement No. 6 of the Tariff Commission in 2025.
(2) Take necessary measures to suspend or cancel the non-tariff countermeasures against the United States that have been in effect since April 2, 2025.

After taking the above measures, both sides will establish a mechanism to continue consultations on economic and trade relations.

Since April 2, 2025 (Eastern Time in the United States), China and the United States have successively imposed reciprocal tariffs on each other in multiple rounds, ultimately reaching a reciprocal tariff level of 125%. However, new energy vehicles and their components and other sectors have been exempted due to the previous Section 232 tariffs. After this round of negotiations between China and the United States, during the 90 days from May 14 to August 12, for China's exports to the United States, only the reciprocal tariff part will be adjusted to 10%, while the 20% tariff on fentanyl will be retained, and tariffs such as Section 301 and Section 232 will also be retained. Starting from August 12, the reciprocal tariff will be adjusted to 34%.

As of May 14, the tariffs on new energy end products exported from China to the United States are:

Overall, due to the exemption of new energy vehicles and their components before and after this adjustment of reciprocal tariffs, the changes in reciprocal tariffs have a greater impact on the export situation of energy storage batteries.

On April 3, 2025, the United States imposed a reciprocal tariff of 125% on China, resulting in the tariff on energy storage battery cells exported from China to the United States reaching as high as 155.9% at one time, which almost brought the direct export of Chinese energy storage battery cells and energy storage systems to the United States to a standstill. This 90-day window period is bound to trigger a rush of exports by Chinese energy storage enterprises. Nevertheless, due to the advantages of Chinese energy storage battery cells in terms of production cost, cell performance, and production capacity and output, even under the tariff policy of 40.9%, the competitiveness of Chinese energy storage battery cells in the US market remains undiminished.

Considering the urgent installation demand for energy storage at the "531" grid-connected node mentioned in Domestic Document No. 136, the energy storage battery cells produced in May may not be able to meet the rush installation boom of this month in a timely manner. Therefore, the market previously expected that the production volume of energy storage battery cells in May may decrease by 5-10% month-on-month compared with April. However, taking into account the golden export window period brought about by the change in US tariffs this time, as well as the approximately one-month shipping period and customs clearance time from China to the United States, it is expected that the production scheduling of energy storage battery cells by leading enterprises in May and June will maintain a relatively high level of prosperity, and the month-on-month growth rate of the output of energy storage battery cells may turn from negative to positive.

Finally, there are still many uncertain factors that need attention. After April 3, 2025, Trump adjusted the tariff policy several times. Therefore, there are many uncertainties regarding the timeliness of the policy cycle after this round of tariff adjustment. In addition, since the total tariffs imposed by the United States on energy storage battery cells still reach the level of 40.9% at present, which is still relatively high, the division of the tariff bearing ratio between US owners and Chinese energy storage manufacturers still needs further discussion. Finally, the 90-day window period of this round of tariff policy adjustment is bound to lead to some domestic enterprises further rushing to export. However, considering the current situation of relatively high inventory of energy storage battery cells in the United States in the past, there are also great uncertainties regarding the scale and rhythm of the subsequent export rush.

SMM New Energy Industry Research Department

Cong Wang 021-51666838

Xiaodan Yu 021-20707870

Rui Ma 021-51595780

Disheng Feng 021-51666714

Yujun Liu 021-20707895

Yanlin Lü 021-20707875

Zhicheng Zhou 021-51666711

Haohan Zhang 021-51666752

Zihan Wang 021-51666914

Xiaoxuan Ren 021-20707866

Jie Wang 021-51595902

Yang Xu 021-51666760

Boling Chen 021-51666836