Supply Chain

‘Trump 2.0ʼ Trade Wars Force Rapid Supply Chain Realignment and De-Risking New OBBB Rules & Tax Credit Timelines New legislation updates the 45X tax credit framework with a strict sunset clause. Credits for battery and solar components remain at 100% through 2029 but face a sharp phase-out starting in 2030, dropping to zero by 2033. Tightened IRA Localization Regulations To qualify for subsidies, manufacturers must meet escalating non-FEOC localization thresholds. The requirement for battery components jumps from 60% in 2026 to 85% by 2029, forcing a rapid decoupling from Chinese supply chains. China's Counter-Moves: Retaliation & Export Control In response to US restrictions, China leverages its upstream dominance by implementing strict export controls on critical inputs - specifically Rare Earths, Graphite, and Battery technologies - creating supply bottlenecks for Western manufacturers. Fluctuations in Tariffs & Material Prices The trade war creates a bifurcated market: overseas prices face a "security premium" due to high tariffs and restructuring costs, while Chinese domestic prices remain low due to trapped excess capacity and "involution".

Source: Bipartisan Policy Center, congress.gov

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