The United States Department of Commerce has imposed a preliminary anti-dumping duty of 93.5% on graphite imports from China, a key raw material used in battery production. The U.S. government concluded that these materials were unfairly subsidized. According to Bloomberg, the preliminary ruling was issued in an official document on Thursday (July 17, 2025) U.S. time, with a final decision expected no later than December 2025.

Graphite is the primary material used to make battery anodes. In the past year, the U.S. imported nearly 180,000 metric tons of graphite, about two-thirds of which came from China, as reported by BloombergNEF. China holds a dominant position in global graphite processing. The International Energy Agency (IEA) identified graphite as one of the most supply-vulnerable materials, calling for urgent diversification efforts.

The IEA also projects that graphite will remain the predominant anode material for all lithium-ion battery types in the medium term. However, silicon is expected to start encroaching on its market share around 2030.

The imposition of this anti-dumping duty could escalate tensions throughout the global electric vehicle (EV) supply chain, which is already under pressure from China’s export controls on certain critical minerals and battery technologies.

According to the American Active Anode Material Producers, this new duty would bring the effective import tariff to 160%. The trade group, which represents U.S.-based graphite producers, filed petitions with two federal agencies in December 2024 requesting an investigation into whether Chinese companies violated anti-dumping laws.

“The Commerce Department’s ruling confirms that China has been selling active anode material (AAM) below fair market value in the U.S.,” said Erik Olson, spokesperson for the anode producers’ trade group.

Sam Adham, head of battery materials at consultancy CRU Group, stated that the new import tariffs would be a major blow to battery makers. He estimated that a 160% duty would effectively add US$7 per kilowatt-hour (KWh) to the cost of a typical EV battery cell—equivalent to about one-fifth of the manufacturing tax credit under the Inflation Reduction Act passed as part of President Trump’s budget plan.

“This could effectively wipe out the profits of South Korean battery manufacturers for one or two full quarters,” Adham said.

Companies like Tesla Inc. and its main battery supplier Panasonic Inc. are among those advocating against the new tariffs. They argue that they still rely heavily on Chinese graphite imports due to the U.S. domestic industry’s limited capacity to meet quality and volume requirements.

These additional import duties will add more strain to the already burdened renewable energy sector. While energy storage continues to benefit from key tax incentives under the Trump administration’s budget, new Treasury Department rules limiting the use of Chinese solar cells have made regulatory compliance harder for many developers. According to Wood Mackenzie, supply chain risks and higher costs are likely to slow the growth of grid-scale storage in the United States.