US Sets 93.5% Duty on Chinese Graphite, Raising Costs and Stakes for EV Industry

A Battery Material Becomes a Trade Flashpoint

The United States has imposed a preliminary 93.5% antidumping duty on Chinese graphite, putting a material used in electric vehicle batteries at the center of its trade dispute with China. Combined with other duties, the total levy on some Chinese graphite products could reach about 160%.

The US Commerce Department's decision creates an immediate expense for importers and a new opening for American graphite producers. It also puts pressure on automakers and battery manufacturers that depend on Chinese supplies while alternatives are still being developed.

China supplies about 75% of the world's refined graphite and nearly two-thirds of US graphite imports. Nearly 180,000 metric tons of graphite products entered the United States last year. Replacing such a large supplier involves more than finding another mine: battery manufacturers need material processed to demanding standards and approved for use in their products.

Graphite forms the anode in lithium-ion batteries, the part that helps store and release energy. Those batteries power electric vehicles and also store electricity for renewable energy projects. A change in the price or availability of graphite can therefore affect both cars and energy infrastructure.

As of July 20, 2025, the central tension is timing. Tariffs can raise the price of imported material immediately, while American factories need time, money and technical work to produce enough suitable graphite. The government is seeking to strengthen domestic manufacturing, but battery makers warn that they cannot quickly replace the Chinese supplies they already use.

The decision arrives alongside other changes affecting electric vehicles. The Trump administration has moved to eliminate or recall federal loans for EV factories and battery plants, and President Donald Trump has signed a bill ending the $7,500 federal tax credit for EV buyers.

Why Commerce Ordered the Duties

The Commerce Department investigated allegations that Chinese companies were selling graphite in the United States below fair market value, a trade practice known as dumping. A parallel investigation examined whether government subsidies gave Chinese suppliers an unfair advantage.

Dumping and subsidies are addressed through different duties. An antidumping duty targets imports sold below fair market value. A countervailing duty is intended to offset government support that gives foreign producers a price advantage. Both can apply to the same imported product.

The American Active Anode Material Producers, a coalition of US and Canadian graphite suppliers, petitioned for the trade measures. The group argues that Chinese overproduction and aggressive exports have made it nearly impossible for American businesses to compete or expand production.

The coalition welcomed the Commerce Department's preliminary findings and described its view of China's trade practices:

"Dumping is a malicious trade practice used by China to undercut competition and wield geopolitical influence," the trade group said in a statement applauding the decision.

Commerce issued preliminary findings that the Chinese graphite imports were being dumped and unfairly subsidized. For domestic producers, the duties offer a chance to compete against imports they say have held prices too low to support investment in American capacity.

Which Graphite Is Covered?

The 93.5% antidumping duty covers graphite intended for anodes with at least 90% carbon purity. It applies to natural graphite, synthetic graphite and blends of the two. Natural graphite is mined, while synthetic graphite is manufactured.

The subsidy investigation resulted in an additional preliminary countervailing duty of 6.55% for most producers. A few specific companies face much higher rates. Together with existing duties, the charges could bring the total levy on some Chinese graphite products to about 160%.

Importers must pay the duties immediately even though the ruling is preliminary. A final determination is expected by December 2025. Companies could receive refunds if that determination reverses the finding.

The immediate payment requirement matters to businesses ordering material for US battery plants. Their purchasing costs change before the final decision and before new domestic suppliers can necessarily deliver replacement graphite.

The key dates and stages are:

• In 2023, Americans bought 1.2 million electric cars, representing about 7.6% of the vehicle market.
• In 2024, the United States imported nearly 180,000 metric tons of graphite products, with about two-thirds coming from China.
• As of July 20, 2025, the preliminary graphite duties require immediate payment by importers.
• By December 2025, a final determination is expected.
• By 2028, Westwater Resources plans to expand annual production capacity to 50,000 tons.

Battery Makers Say Purity Limits Their Options

Tesla, Ford, Panasonic and LG Energy Solution rely heavily on Chinese graphite for their US battery plants. During the tariff investigation, Tesla and other companies argued that American suppliers could not yet produce the graphite they needed at commercial scale.

Their concern goes beyond the amount of graphite available. Batteries require extremely pure material because metallic impurities can affect performance. Although the duty covers anode graphite with carbon purity of at least 90%, battery manufacturers can require a much higher level.

Matt Nicely, an attorney representing Tesla, told officials that battery producers require 99.9% carbon purity. He argued that the domestic industry's production limitations were central to the dispute:

Lithium-ion battery producers demand graphite with a 99.9 percent carbon purity level, meaning extremely low metallic impurities. Not a single US producer is able to produce graphite to these exacting specifications. Domestic producers cannot blame imports when they are not yet able to produce the product the market demands.

Automakers and battery manufacturers therefore face two linked tasks: finding enough graphite outside China and making sure it meets their exact specifications. A supplier offering graphite at the right price still needs to demonstrate that its material is suitable for the batteries being built.

American Producers Expect Growth, With a Delay

US graphite companies see the tariffs as support for a domestic industry that has struggled against Chinese competition. They also acknowledge that increasing production and winning approval from battery customers will take time.

Mike O'Kronley, chief executive of Novonix, a graphite manufacturer based in Chattanooga, described the work required to develop material and qualify it for batteries:

This material takes a long time to develop and qualify to be used in batteries. So it's not very easy to switch or change supply. Tariffs will not have an immediate effect with changing supply. But we will see changes over time and the development of a US industry is going to happen now, or it's going to be accelerated.

Westwater Resources, which is building a graphite plant in Alabama, announced plans to expand production capacity to 50,000 tons annually by 2028. Its shares rose 15% following the tariff announcement.

Investors also pushed up shares in non-Chinese graphite companies, including Australia's Syrah Resources and Canada's Nouveau Monde Graphite. Those gains reflected expectations that buyers would seek more material from outside China.

Novonix and Westwater are increasing production, but building a domestic industry requires substantial investment, technical expertise and time. US suppliers could take years to meet the EV industry's full demand for graphite of sufficiently high purity.

The tariff gives those projects a stronger commercial incentive by making competing Chinese material more expensive. Battery manufacturers still have to manage the period between higher import costs and the arrival of enough approved replacement supply.

How Much Could Electric Cars Cost?

Graphite accounts for less than 8% of a battery's total cost, according to Panasonic. That share limits its direct contribution to battery expenses, but batteries themselves are the most expensive component in an electric vehicle.

Estimates put the possible increase from doubling graphite costs at $1,000 or more for a battery pack. Whether that becomes a similar increase in a vehicle's selling price depends on how much of the expense automakers and battery companies absorb and how much they pass to buyers.

The pressure comes at a sensitive point for EV affordability. The average electric vehicle sold for $52,345 in late 2023, compared with $48,247 for all vehicles. Electric cars were already more expensive on that measure before the new graphite duties.

Americans bought 1.2 million electric cars in 2023, about 7.6% of the vehicle market. Further growth depends partly on making models affordable to buyers who cannot pay a large premium over a gasoline vehicle.

The end of the $7,500 federal purchase credit adds another source of pressure. Alongside changes to federal loans for EV factories and battery plants, it could increase the difficulty of lowering production costs and attracting buyers.

Assessments of the immediate price effect vary. Some expect a limited increase because graphite is a relatively small part of battery costs and manufacturers may absorb some of the expense. Others warn that even a modest increase can weaken demand, particularly for cheaper models intended for mainstream buyers.

Automakers must weigh higher material expenses against the risk of losing customers. Passing on every increase could make vehicles harder to sell, while absorbing the costs would put pressure on their own finances.

Korean Suppliers Face the Same Cost Pressure

Korean battery manufacturers supplying American automakers are also exposed to the graphite duties. Companies including LG and Samsung SDI rely on Chinese material and are examining alternative suppliers while considering how much of the added expense they can absorb or pass on.

Their position shows why a US tariff can affect companies across several countries. A battery business may be Korean, supply an American automaker and depend on graphite processed in China. Changing one part of that chain can alter costs throughout it.

China's large share of refined graphite production makes a rapid shift difficult. With about 75% of global refined supply coming from China, many manufacturers seeking alternatives will be looking toward a much smaller pool of existing production.

The International Energy Agency has warned that graphite is among the battery materials most exposed to supply risks. For countries seeking reliable supplies for clean technology, the concentration of production makes diversification a priority.

Higher prices may encourage new suppliers to invest, but manufacturers need dependable deliveries as well as competitive prices. Delays in qualifying material or expanding factories can leave them reliant on their existing supply arrangements even after tariffs make those arrangements more expensive.

Energy Storage and Industrial Investment Are Also Exposed

Renewable energy storage projects use the same lithium-ion battery technology as electric vehicles. Higher battery costs could slow the rollout of systems that store electricity for later use.

Supply uncertainty and volatile prices could also discourage investment in manufacturing plants and infrastructure. Businesses planning expensive facilities need confidence that materials will be available at costs they can manage.

The graphite action forms part of a broader US effort to secure critical minerals and clean energy supply chains. Both the Trump and Biden administrations have taken steps to support domestic mining, processing and manufacturing involving graphite, lithium, nickel, cobalt and rare earth elements.

The aim is to build a US battery industry that supports manufacturing jobs, clean transportation and renewable energy while reducing dependence on foreign supplies. Achieving that requires factories capable of delivering consistent material at the purity and volume customers need.

Higher costs during the transition could work against the expansion of electric vehicles and energy storage. The industrial benefit sought by the government depends on domestic production growing enough over time to give buyers reliable alternatives.

Trade Tensions Add to the Supply Challenge

China had not announced retaliation to the graphite tariff as of July 20, 2025. Beijing had already imposed export controls on some critical minerals and battery technologies, adding to concerns about a broader trade conflict involving clean energy.

The United States and its allies are trying to diversify supply chains, but China's established position makes that process complex. Its battery industry benefits from technology and closely connected production networks that American competitors are trying to match.

US policy seeks to give domestic automakers and battery suppliers time to catch up. The tariffs are intended to prevent cheap Chinese batteries and cars from overwhelming American manufacturing, with jobs and national security among the government's concerns.

For the companies purchasing graphite now, the practical choices are more immediate. They can seek alternative suppliers, pay more for Chinese material, absorb some of the increase or try to recover it through higher prices. Switching suppliers requires material that meets their standards and is available in sufficient quantities.

The next formal milestone is the final determination expected by December 2025. Until then, importers face preliminary duties, domestic producers have a stronger incentive to expand, and consumers face a market in which battery costs and purchase incentives are both changing.

The longer goal is a more secure and competitive American battery industry. The immediate challenge is keeping batteries and electric vehicles affordable while that industry develops.

Key Points

• The United States imposed a preliminary 93.5% antidumping duty on Chinese anode graphite with at least 90% carbon purity.
• A separate preliminary subsidy duty is 6.55% for most producers, with higher rates for some companies. Total duties on some products could reach about 160%.
• China supplies about 75% of the world's refined graphite and nearly two-thirds of US graphite imports.
• Battery manufacturers say they need graphite with 99.9% carbon purity and cannot quickly replace Chinese supplies with American production.
• Graphite represents less than 8% of battery costs, according to Panasonic, but doubling its cost could add $1,000 or more to a battery pack.
• Domestic producers are expanding, including Westwater Resources, which plans annual capacity of 50,000 tons by 2028.
• Importers must pay the preliminary duties immediately. A final determination is expected by December 2025, with possible refunds if the finding is reversed.