North American graphite miners are lobbying the US government to impose a 25% tariff on three graphite products sourced from China. The move is aimed at countering Beijing’s monopoly on a key material used in automobile batteries.
The US government is set to decide in May whether to bring graphite into the list of minerals that attract the higher Section 301 tariff, which was introduced by former President Donald Trump after his administration found China’s “acts, policies and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory”.
Graphite was previously exempted from the tariff because China accounts for 70% of global output of the material, which is used to make electric battery anodes. However, the North American graphite manufacturers are now arguing that this exemption has allowed China to maintain its dominance and undermine their ability to secure offtake agreements with automakers.
The OEM lobby group opposes the higher tariff, arguing that without a credible supply chain from North America, they are forced to depend on China, and tariffs make them uncompetitive against Chinese automakers. However, the graphite miners claim that allowing the free flow of graphite from China into North America harms their chances of raising capital, as automakers would shun future offtake agreements if they could source graphite from China cheaply.
“If we don’t secure the project financing… we won’t be able to build a north American supply chain,” said Hugues Jacquemin, CEO of Montreal-based Northern Graphite.
The dispute highlights the broader tensions around critical minerals, which have become a flashpoint as Western countries try to reduce their reliance on China for these key materials in the energy transition. In October last year, Beijing imposed controls on graphite exports from the country to help “better safeguard national security and interests”.