Solar cells. Solar panels. Inverters. Steel. Aluminum frames for PV modules. There is practically no part of the solar supply chain that has not been affected by one of the many tariffs that the Trump Administration has imposed on products from around the globe – but mostly from China.

And now, batteries will be included as well. Lithium-ion batteries, to be exact. The code HTSUS 8507.60 is included on a list published yesterday by the U.S. Trade Representative of products from China that will be subject to 10% duties under the latest of several rounds of Section 301 tariffs that President Trump has imposed.

The announcement that clarified the inclusion of lithium-ion batteries also exempted a number of other products based on “health, safety, national security and other factors”, and delayed tariffs on a third group until December 15.

China’s battery sector casts a long shadow over the rest of the world; In 2018 the nation hosted 2/3 of the global manufacturing capacity for the kinds of lithium-ion batteries that are used in electric vehicles and energy storage in the electricity sector.

Unsurprisingly, in June Energy Storage Association (ESA) CEO Kelly Speakes-Backman issued a statement warning that imposition of tariffs on Chinese batteries would have an “immediate and adverse” effect on energy storage deployments:

The proposed tariffs will stymie growth and job creation as energy storage projects already contracted are delayed or canceled. With this, higher costs and uncertainty will create barriers at a time when the demand for improved resilience and clean energy is rising across the nation.

As similar batteries are also used in electric vehicles, there could be an impact on the EV market as well.

U.S. manufacturers not spared

Tariffs should give U.S. battery makers such as Tesla should a competitive advantage versus imported batteries; however according to ESA a previous round of Section 301 tariffs have already been imposed on some lithium, cobalt and graphite inputs which are the main raw materials used in these batteries.

As China represents the majority of the world’s chemical lithium and chemical cobalt and all of its spherical graphite production, these tariffs are doubtless already affecting Tesla’s Nevada Gigafactory and the small amount of other U.S. battery manufacturing – including factories such as the one that Akasol has planned near Detroit.