Like oil in the 1970s or semiconductors in the 1990s, lithium-ion batteries could become a key fault line of global commerce. This brief piece will offer some thoughts on what the consequences could be as a result of:
1. The imposition of 25% duties on a wide range of automotive components—including lithium-ion battery cells and modules—under the authority of Section 232.
2. The reciprocal tariffs, levied country-specific duties of 10–25%.
3. The Chinese response to 2, including 34% reciprocal tariffs on US goods.
4. The American response to 3, a 50% tariff on Chinese goods.
5. The Chinese response to 4, an 84% tariff on US goods.
Having strong connections to the sell-side and buy-side of our industry means we can detect early signals on where battery flows will be redirected to. Surplus or idle inventory of cells and modules, along with many other goods, will likely be influenced by the high-stakes gamesmanship between the US and China. Note the concluding sentence from Ministry of Commerce of the People's Republic of China, to the initial tariff announcement:
“China urges the U.S. to immediately revoke these unilateral tariffs and resolve differences with trading partners through equal-footed dialogue.”
Which at the time, suggested positioning and lining up a potential Xi-Trump summit later this year, giving time for their tariff measures to bite. On battery economics for example, an analysis by Cameron Murray at Energy Storage News pointed to BESS systems coming from China as having a total tariff of more than 82%. Where those economics will be as we approach summer has a huge potential range. This week even has a huge potential range.
Instead, can secondary marets in the rest of the world such as Europe, Latin America, Asia, and the Gulf soak up any excess supply? EC President Ursula Von Der Leyen also cautioned against dumping in her reaction to the Tariffs (3 April):
“We will also be watching closely what indirect effects these tariffs could have, because we cannot absorb global overcapacity nor will we accept dumping on our market.”
Either way, idle batteries may need to be allocated and rerouted from their previous destinations. An analysis from Thomas Kavanagh et al at the Argus price reporting agency highlighted that the US imported $23.8bn worth of battery cells last year, with key exporters to the country including:
The potential realignment of previously established battery flows means there is a pressing need for a way to accelerate battery trades, and also, a place for buyers and sellers of batteries to meet and transact. These trades rely on precise alignment of product specifications, pricing, volumes, logistics, regulations, and timing: Regardless of what chaos is playing out in the markets right now.
In this new environment, sellers and buyers prioritise flexibility. With the U.S. entering a turbulent period, the focus can shift to other markets, or even secondary ones. Europe, Latin America, Asia, the Gulf, and parts of Africa are drawing more attention as buyers of surplus or idle cells and modules. While these markets can be fragmented and come with their own nuances and frustrations, they are also a ready alternative if needed.
This shift also changes what it means to trade batteries effectively. It’s no longer about just having the best price or spec. It’s about getting the right product to the right buyer at the right time, within the relevant framework of local requirements, certifications, and logistics.
That requires better market intel, faster decision-making, and more flexibility in how deals are structured. Seeing through the volatility in the markets is phenomenally hard. But, regardless, battery supply will find new destinations.
We’ve just turned five and as we mark the occasion, we’re consolidating all of our learnings and processes into one system that accelerates battery transactions. More to come.
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