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North American graphite miners seek tariffs to counter China’s grip on EV battery supply chain

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North American graphite miners are urging the U.S. government to impose a 25 percent tariff on three graphite products from China. This move aims to combat Beijing’s stronghold on a crucial material used in electric vehicle (EV) batteries.

If successful, this action could create friction between the miners and their primary customers, the original equipment manufacturers (OEMs). Additionally, it could escalate tensions with China, which controls a significant portion of the critical metals essential for the world’s electric vehicles and other motor vehicles.

The U.S. government is expected to make a decision in May regarding whether to include graphite in the list of minerals subject to higher Section 301 tariffs.

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The Section 301 tariff was introduced during the tenure of former U.S. President Donald Trump, targeting China’s practices related to technology transfer, intellectual property, and innovation. While many parts used in electric vehicles already face additional levies, graphite was previously exempted due to China’s dominant position in global output.

Graphite is a vital component in electric battery anodes. However, the reliance of graphite manufacturers on agreements with automakers for capital raises concerns. If OEMs can obtain cheaper graphite from China, they may opt out of these agreements.

The OEM lobby group opposes the proposed tariff hike, arguing that without a reliable North American supply chain, they are compelled to rely on China. They contend that tariffs would render them uncompetitive against Chinese automakers.

The United States Trade Representative, responsible for imposing tariffs, has not responded to inquiries regarding the inclusion of China-sourced graphite in the Section 301 list.

Graphite miners emphasize that unrestricted graphite imports from China hinder their ability to secure project financing. This poses a significant challenge to building a North American supply chain.

Critical minerals like lithium and graphite have emerged as focal points as Western nations seek to reduce dependence on China for these essential metals vital for the energy transition.

In response to growing concerns, Beijing implemented controls on graphite exports last year to safeguard national security and interests.

Top buyers of China’s graphite include Japan, the United States, India, and South Korea, according to customs data.

Erik Olson, spokesperson for the North American Graphite Alliance, asserts the need for trade protections to counter China’s dominance in graphite production and its impact on the global market.

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