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| Author | Jonathan Chou, Robin Song |
| Updated | May 16, 2024 |
On May 14, 2024, the Biden administration announced new tariffs after a two-year review of Section 301, hiking levies on a backset of Chinese imports, including solar cells and modules, lithium-ion EV batteries, lithium-ion non-EV batteries, battery parts and components, etc.
Tariff rates will double from 25% to 50% for solar cells and modules after 2024 and rise from 7.5% to 25% for lithium-ion non-EV batteries (most energy-storage batteries) in 2026. The tariff rate on natural graphite will increase from zero to 25% in 2026.
Changes and effective years are as follows:
InfoLink analysis
Solar
Before this decision, the U.S. had imposed several trade barriers against Chinese solar cell and module imports. In addition to the original 25% tariff under Section 301, there are antidumping and countervailing duties (AD/CVD) coming into force in 2012 and Section 201 tariffs targeting cells and modules from all countries. As a result, manufacturers choose not to import products directly from China to the U.S. Rather, they relocate production to Southeast Asia, shipping to the U.S. from there to bypass lofty import tariffs.
On the other side of the Pacific Ocean, U.S. manufacturers have been struggling with more expensive electricity and workforce. Naturally, Southeast Asia rose as the chief source of solar cells and modules for the U.S. On Aril 24, 2024, U.S. manufacturers filed petitions asking for AD/CVD investigations against production in Cambodia, Malaysia, Thailand, and Vietnam.
Energy storage
Biden’s new tariffs will push the production cost of China-made energy-storage cells to be on par with U.S.-made ones in 2027 and higher than the latter during 2028 and 2029, then return to the same level in 2030 as IRA subsidies phase out. The increased Section 301 tariffs and the IRA allow LG, Samsung SDI, and other non-Chinese manufacturers to reap some benefits from the U.S.’ reshoring efforts and gain market shares. Currently, LG demonstrates the most production expansion plans, potentially accumulating 25 GWh of energy-storage cell production capacity in the U.S. by 2027.
Phasing in gradually in 2026, the new tariffs will not affect demand in the short term. As the effective date nears, downstream sectors will stockpile and install in advance, resulting in higher-than-expected demand in the second half of 2025.
