Commerce unveils low CVD rates in battery anode tariff case

The Dept. of Commerce has released its preliminary countervailing duties (CVD) in the trade case involving battery anode material from China. Preliminary antidumping (AD) rates should be revealed in July. The U.S. International Trade Commission (ITC) has already made an affirmative preliminary decision in this matter.

Preliminary subsidy rates

Companies	Preliminary CVD rate
Huzhou Kaijin New Energy Technology	712.03%
Panasonic	6.55%
Shanghai Shaosheng Knitted Sweat	721.03%
All others	6.55%

 

The investigation was first petitioned in December 2024 by the American Active Anode Material Producers (AAAMP). The group claimed that China’s dominance on active anode material (AAM) used in lithium-ion energy storage and EV batteries has prevented the domestic market from establishing competitive operations.

The ITC found some merit behind this claim, indicating that the U.S. AAM industry has been “materially retarded” by dumped and subsidized imports from China. Whereas previous AD/CVD cases in the solar panel space could prove a clear “before” and “after” level of harm once dumped Chinese product entered the United States, the AAM industry does not yet have significant product output to compare. The ITC’s preliminary decision sets up a unique opportunity for other similar product manufacturers to allege material harm to domestic industries — the currently nonexistent silicon wafer industry in the United States could claim harm by China’s dominance, for example.

Industry analyst Roth Capital Partners said the 6.55% “all others” CVD rate was significantly lower than expected. Roth estimates that this lower rate could increase the cost of a battery cell by 0.6% and add 0.3% to the cost of a DC block — immaterial numbers.

The petitioners did not request specific CVD rates, but did call for antidumping margins of over 900%. The industry expects the preliminary AD rates to be more significant than what was released this week.

What are battery active anode materials?

A battery needs both a cathode and anode to facilitate the flow of electric charge. During battery charging, electrons move from the positive cathode to the negative anode, and that electrical difference is what translates to stored energy. The stated “chemistry” of a battery is its active cathode materials — lithium iron phosphate (LFP) or lithium nickel manganese cobalt (NMC), for example. Active anode materials are typically carbon-based — like graphite powder or silicon oxide. The materials are mined, ground to a fine powder and then coated on the anode (usually copper foil).

In the original petition, AAAMP requested duties on all active anode materials, whether synthetic, natural or a blend; with or without coating; regardless of whether in powder, dry, liquid or any other form. Subject merchandise can be mixed with silicon or not, but the graphite contained must have a minimum purity content of 90% carbon. The duties could be levied against anode materials whether they’re imported separately, in a compound or in a finished battery.

AAAMP claims that it represents the only domestic manufacturers of active anode materials. Membership consists of Anovion Technologies (Georgia), Syrah Technologies (Louisiana), NOVONIX Anode Materials (Tennessee), Epsilon Advanced Materials 5060 (North Carolina) and SKI US/Birla Carbon (Georgia/South Carolina). Most of these companies are still considered to be in the startup stage. AAAMP claims in its petition that the domestic AAM industry is struggling to get off the ground because of China’s oversupply.

Next steps

Now with the preliminary CVD rates released, Customs and Border Protection will begin collecting CVD in addition to the existing tariffs already imposed on lithium battery imports from China.

Commerce should release its preliminary AD rates in July. Commerce would then release its final determinations in September/October, and the ITC would issue its final determination around Nov. 13.