Batteries, Critical Minerals, Magnets – U.S. Expands Tariffs on Chinese Imports

by | 14. May 2024 - 12:46 | Politics

After the levy on EVs became known in advance, the White House published the final list of updated tariffs.

Yesterday, we reported on U.S. President Joe Biden’s plans to hike import tariffs on Chinese electric vehicles and other clean-tech goods. On Tuesday, the White House published a concrete list of updated and to-be-imposed tariffs. Besides the quadrupled levy on EVs, multiple new additions and hikes are part of the list. While the rates on semiconductors and solar cells will double from 25 to 50 percent each, tariffs on lithium-ion batteries for EV and non-EV usage and battery parts will more than triple from 7,5 to 25 percent. Tariffs on certain steel, aluminum, and personal protective equipment will be set at 25 percent, up from zero to 7.5 percent. In addition, entirely new tariffs will be imposed on natural graphite, certain other critical minerals, and permanent magnets at a rate of 25 percent, while the levy on syringes and needles will even reach 50 percent. The tariff on magnets especially marks a shift in Biden’s strategy, as the President refrained from imposing such in 2022. The list’s publication marks the end of a four-year-long review of the Trump-era policy.

List Will Gradually be Imposed – Magnets in 2026

According to the White House, the tariffs will affect imports from the People’s Republic worth $18 billion and are part of Biden’s plans to reshore the supply chains of critical minerals, semiconductors, and clean-tech goods. All tariffs are set to be imposed this year, with the rates on semiconductors following in 2025 and natural graphite, non-EV lithium-ion batteries, and permanent magnets in 2026. The latter presents one of the most difficult challenges, as China accounts for roughly 90 percent of rare earth magnet production, according to data by research company Fastmarkets.

There are currently two large-scale projects in the U.S. to construct domestic magnet manufacturing facilities. MP Materials, the operator of the only rare earth mine in the U.S., Mountain Pass, recently secured $58.5 million in government support to advance the construction of its magnet factory in Fort Worth, Texas. In addition, German rare earth magnet manufacturer Vacuumschmelze’s U.S. subsidy E-Vac Magnetics will receive tax credits of 111.9 million dollars to accelerate the construction of its first U.S. factory in South Carolina. Both facilities are planned to commence operations in 2025.

Photo: iStock/carcar797

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