The U.S. Department of Commerce has proposed countervailing duties of up to 721% on synthetic and natural graphite anode material from China. This follows claims that China has subsidized its graphite industry, making it hard for other countries to compete. The move is part of a wider strategy to build local supply chains for battery materials.
The preliminary decision includes natural and synthetic graphite used in lithium-ion battery anodes. A second ruling on whether Chinese companies are dumping graphite at unfair prices is expected in July. Final results for both cases will be announced around December 5, 2025.
Northern Graphite, the only current producer of natural graphite in North America, welcomed the news. The company plans to expand into battery-grade material production in Canada. CEO Hugues Jacquemin said the tariffs could create more demand for local sources. Around 90% of graphite upgrading currently happens in China. The company’s Lac des Iles mine in Quebec is producing flake graphite, and Northern is preparing to grow capacity to support North American battery makers.
NOVONIX, another supporter of the tariffs, produces synthetic graphite in Tennessee and is building a second plant to raise output to more than 50,000 tonnes per year. The case was brought by the American Active Anode Material Producers, including NOVONIX and Northern Graphite, who say Chinese subsidies have distorted the market.
For European graphite producers, the immediate risk is increased competition. As Chinese suppliers face higher barriers to the U.S. market, they may redirect more material toward Europe, which currently lacks similar trade restrictions. This could lead to downward pressure on prices, challenging the business case for European producers, particularly those investing in higher-cost, sustainable alternatives. Such market dynamics may slow investment and delay the scale-up of new projects, which could affect the EU’s efforts to build a resilient domestic graphite value chain. At the same time, European buyers, including battery manufacturers, may benefit in the short term from improved supply availability and lower input costs.
Looking ahead, a growing reliance on external sources of graphite may raise concerns among European policymakers about long-term supply chain resilience and strategic autonomy, key priorities under the EU’s Critical Raw Materials Act and Green Deal Industrial Plan. The U.S. decision could prompt the EU to evaluate its own trade policy tools, including potential countermeasures, especially if there is a perception that non-market factors are impacting global graphite pricing. Without a clear strategy, Europe could become a primary destination for surplus graphite supply, making it more difficult for domestic industry to compete. While current conditions may appear favorable for buyers, a coordinated policy approach may be needed to support the growth and stability of the European graphite sector over the long term.
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