Theme of the Day: US confirms 25% tariff on critical minerals from China, 100% on EVs

The US has confirmed it will go ahead with Section 301 tariffs on a variety of commodities from China, according to the Office of the United States Trade Representative. The tariffs include: 100% on electric vehicles; 50% on solar cells and semiconductors; 25% on steel; aluminium; EV batteries and key critical minerals."Today’s finalized tariff increases will target the harmful policies and practices of the People’s Republic of China that continue to impact American workers and businesses… These actions underscore the Biden-Harris Administration’s commitment to standing up for American workers and businesses in the face of unfair trade practices" - Ambassador Katherine Tai, Office of the United States Trade Representative (USTR).The range of minerals impacted by the 25% tariffs include: steel; aluminium; lithium-ion batteries for electric vehicles and other devices; ores and concentrates of manganese; cobalt; chromium and tungsten; tungsten oxides; tungstates; carbides and powders; unwrought tantalum; chromium and indium including their powders: ferronickel; ferroniobium (max. 0.02% P or S, max 0.4% Si); natural graphite; tin alloys.The tariffs on electric vehicles, lithium-ion batteries, critical minerals and components will go into effect on September 27 (including indium, tantalum, chromium, cobalt, and tungsten). Tariffs on all other devices, semiconductors, as well as natural graphite and permanent magnets will go into effect on January 1, 2026.According to Reuters, the final decision largely disregarded pleas from automakers for lower tariffs on graphite and critical minerals used in EV battery production because they are still dependent on Chinese supplies. The move comes as both the EU and Canada also impose tariffs on a range of EVs and commodities from China.US miners and US automakers are on a collision course over supply of critical minerals for electric batteries. The reason: a "flood" of electric vehicles from China. Chinese electric vehicle exports threaten to divide US automakers and miners over the seemingly inconspicuous section 30D of the US Inflation Reduction Act — or what critical minerals can be sourced from so-called "Foreign Entities Of Concern".The US and its free trade partners (e.g. Australia and Canada) cannot produce enough critical minerals at competitive prices and in high enough quantity, compared to China’s critical mineral supply chains.