On May 20, 2025, the US Department of Commerce announced a preliminary affirmative determination in the countervailing duty (CVD) investigation of active anode material from China, concluding that imports of active anode material from China involve unfair subsidies. It decided to impose a countervailing duty of up to 721.03% on related products.

Active anode material is a key component of lithium-ion batteries for electric vehicles, covering natural and artificial graphite, silicon, etc. The tariff increase mainly involves products under US customs codes 2504.10.5000 and 3801.10.5000. According to the US Department of Commerce, the US imported approximately $350 million worth of active anode material from China in 2023.

The US Department of Commerce, while making the preliminary countervailing duty ruling, is also conducting an antidumping duty (AD) investigation into active anode material from China, with the preliminary determination expected on May 27, 2025. The Department will then make a final determination on September 19, 2025, subject to approval by the US International Trade Commission (ITC), which will make its final determination on November 13, 2025, with the final order issued on November 20, 2025.

China is the world’s largest graphite producer, dominating the graphite industry. According to Capstone LLC data, the US is highly dependent on China for graphite, importing 59% of its natural graphite and 68% of its artificial graphite from China. US graphite producers, one of the key petitioners pushing for the investigation, argue that Chinese manufacturers receive high subsidies, artificially depressing prices and putting US domestic manufacturers at a severe disadvantage in market competition.

The US Department of Commerce’s preliminary ruling to impose high countervailing duties on Chinese active anode material is purportedly aimed at combating China’s subsidies for battery materials. Meanwhile, a separate investigation into alleged unfair pricing is ongoing.

Notably, Tesla explicitly opposed the tariff increase earlier this year on the grounds of a lack of qualified domestic supply. However, the US Department of Commerce’s ruling suggests that the US government prioritizes so-called long-term industrial resilience over potential short-term market disruptions.

Additionally, the Republican Party’s recent tax reform plan is expected to eliminate consumer credits for electric vehicles, while greatly increasing tariffs will further raise costs for US manufacturers. These trade cases against Chinese active anode material are expected to reach final determinations later this year and are unrelated to the broad tariffs the US President imposed on all trading partners or the planned tariffs on semiconductors, pharmaceuticals, and other goods.

This series of measures will undoubtedly intensify trade friction between China and the US in the battery materials sector, exerting far-reaching impacts on the global electric vehicle industry chain.