North America

One-Year USChina Trade Deal Lowers Battery Material Barriers On 1 November, the White House released details on the one-year agreement the US President reached with China. The key updates related to the battery value chain are the relaxation of US tariffs on Chinese goods and Chinaʼs export controls. US cut the 10% fentanyl tariff for one year. The suspension of heightened reciprocal tariff was also extended. The 10% reciprocal tariff will remain during the suspension. China removed the latest export restrictions on various battery materials announced on 9 October, which required companies to apply for export licenses. Before the trade deal was released, Korean battery and CAM producers front-loaded export orders for ternary precursor in November because, although Chinese firms were confident that they would obtain the licenses, the approval procedure normally takes 24 months and could affect exports in Q4. Opportunity: The extension period buys more time for US companies to secure alternative supplies. Risks:

China dominates the global supply chain. Ramp-up periods for and OEM certification timelines for new supply are longer than this 1-year extension.

Technology export controls that remain in place increase the difficulty for US and other players to build local capability utilising Chinese technology.

Source: Content & analysis provided by CRU Group Distinguished Partner). For more information, visit crugroup.com.

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