China to Place Export Restrictions on Battery Components and Critical Minerals

­President Trump won’t be the only one placing heavy restrictions on items originating in China – China, itself, is set to join the party, but instead of tariffs, the PRC will institute outright bans and constraints on battery components and minerals like lithium and gallium.

As Reuters points out, these measures are aimed at protecting China’s 70% share of global lithium processing into battery-grade material – specifically, lithium iron phosphate batteries (LFP) and lithium manganese iron phosphate (LMFP), along with processes for the extraction of lithium carbonate.

“Depending on the level of export restrictions imposed, this could pose challenges for Western lithium producers hoping to use Chinese technology to produce lithium chemicals,” said Adam Webb, head of battery raw materials at consultancy Benchmark Mineral Intelligence.

By comparison, in his first term, Trump instituted heavy tariffs on solar panels from outside the U.S., with the main target being China. In 2018, the tariffs on modules and cells stood at 30%, with it dropping down to 15% by year 4. President Biden subsequently extended the 15% tariffs another 4 years in 2022.

In that case, it definitely hurt China, but it also had some unpleasant side effects for U.S. businesses that relied on cheap, Chinese imports (like solar panel sales).

It remains to be seen whether China’s own restrictions will effect them domestically, but the potential damage to the U.S. (and the world) is clear.

Webb adds that "These proposed measures would be a move to maintain this high market share and to secure lithium chemical production for China's domestic battery supply chains."