Graphite producers outside China have reacted carefully to Trump’s re-election, recognizing that his trade policies could either support or challenge their industry. Trump’s history of placing tariffs on Chinese imports raises concerns, particularly since China is a key supplier of graphite used in electric vehicles and batteries. In his last term, he imposed broad tariffs but allowed some graphite exemptions. Now, he is hinting at even higher tariffs, potentially up to 60%, which would impact battery manufacturers relying on Chinese graphite.
Earlier this year, the Biden administration already planned a 25% tariff on graphite from China by 2026, but Trump’s new tariff proposal would be much higher. Some expect that Trump might still make exceptions for graphite if carmakers like Tesla push for it. Elon Musk, Tesla’s CEO, supported Trump’s campaign, which could influence Trump’s decisions around tariffs to protect U.S. automakers from high graphite costs.
There’s also concern that Trump could reduce or roll back Biden’s EV subsidies, established under the Inflation Reduction Act (IRA). However, most producers believe that these incentives are likely safe, given the significant investments already made under the IRA, especially in Republican-led states.
Musk’s support could also mean Trump might consider policies to protect major U.S. car companies like Tesla, potentially reintroducing exemptions for synthetic graphite and delaying rules that limit Chinese-sourced graphite in EVs. Trump’s administration is expected to favor domestic industry, which may benefit North American graphite producers.
For European graphite producers, Trump’s policies could go either way. Higher U.S. tariffs on Chinese graphite could create new market opportunities for European suppliers as an alternative to China. However, increased competition from North American producers, especially if they receive government support, could make it harder for European companies to compete on price. European producers may need to adapt to new market demands and a potentially protectionist U.S. market.
Read full article at: https://www.fastmarkets.com/insights/graphite-producers-trump-re-election/
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