The US Department of Commerce announced today the preliminary anti-dumping tariff rates for the Chinese battery anode material trade case. Almost all important American battery exporters, including Atos Sunshine Power, LG Energy Solutions, Panasonic, Shuifude, Samsung, and Tesla, have been subject to an anti-dumping tax rate of 93.5%. The anti-dumping tax rate within China (for enterprises that have not responded to the petition request from the Ministry of Commerce) is 102.72%. The complete list of exporters and producers under the tariff order can be viewed here.

The anti subsidy tax rate is much lower than the tax rate of over 800% required by the applicant, the American Activated Anode Material Manufacturer (AAAMP). The US Department of Commerce also announced a relatively mild countervailing duty (CVD) rate, which is only 11.58% for most of the sued companies, including major battery manufacturer Panasonic. After the merger of the countervailing duty and CVD tax rates, the initial tax rate will reach between 105.08% and 114.4%. Industry analyst Roth Capital Partners estimates that this merger tax rate could lead to an 11-12% increase in the cost of lithium-ion batteries and a 5-6% increase in the cost of DC blockers. The company stated that these increases are within a controllable range and are unlikely to affect industry demand.

The Association of American Automobile Manufacturers (AAAMP) has requested an anti-dumping/countervailing investigation, requesting the government to review active anode materials (AAM) used for lithium-ion energy storage and electric vehicle batteries. AAAMP claims that China's dominant position in AAM production hinders the establishment of competitive operations in the domestic market. The US International Trade Commission (ITC) made a preliminary affirmative ruling in January, determining that imported active anode materials from China are harming US industries.

ITC stated that the AAM industry in the United States has been severely hindered by dumping and subsidizing imported products from China. Previously, anti-dumping/anti subsidy cases in the field of solar panels could clearly demonstrate the degree of "pre - and post damage" caused by dumping Chinese products into the United States, and the AAM industry currently lacks a large number of comparable product production samples.

However, based on the preliminary anti-dumping/countervailing duty rates disclosed, the Ministry of Commerce believes that the damage is not as severe.

What is battery active anode material?

Batteries require cathodes and anodes to facilitate charge flow. During battery charging, electrons move from the positive cathode to the negative anode, and this potential difference is converted into stored energy. The "chemical properties" of a battery refer to its active cathode material, such as lithium iron phosphate (LFP) or lithium nickel manganese cobalt (NMC). The active anode material is usually a carbon based material, such as graphite powder or silicon oxide. These materials are extracted, ground into fine powder, and then coated on the anode (usually copper foil).

AAAMP claims that it represents the only domestic manufacturer of active anode materials. Its members include Anovion Technologies (Georgia), Syrah Technologies (Louisiana), NOVONIX Anode Materials (Tennessee), Epsilon Advanced Materials 5060 (North Carolina), and SKI US/Birla Carbon (Georgia/South Carolina). Most of these companies are still considered startups. AAAMP claims in its petition that the domestic AAM industry is struggling to start due to oversupply in China.
Subsequent steps

The US Customs and Border Protection has been imposing CVD on imported AAM since May and will now begin imposing anti-dumping duties, in addition to the existing 40.9% tariff on lithium batteries imported from China.

The Ministry of Commerce clarified that electric vehicles and complete battery energy storage system containers used for utility scale and residential applications are not within the scope of investigation. But the original AAM, battery cells, and battery modules are all within the scope of investigation and require payment of tariffs. Domestic battery manufacturers will feel the burden of tariffs, while importers of battery energy storage systems will not.

The US Department of Commerce is expected to issue its final ruling in September/October, while the ITC is expected to issue its final ruling around November 13th.