As the United States is expected to ramp up trade pressure on China in the battery and energy sectors, industry experts see potential opportunities for Korean battery makers. The structural shift away from dependence on China could bring windfall benefits to domestic companies. However, many analysts urge caution, warning against excessive optimism amid heightened business uncertainty stemming from frequent tariff policy changes.
Industry sources reported on Friday that the Trump administration is exploring new national security tariffs under Section 232 of the Trade Expansion Act. The proposed measures could target large-capacity batteries, power grids, and telecommunications equipment. Section 232 empowers the president to impose tariffs or other measures if imports are deemed a threat to national security.
In Congress, a bill has been introduced to completely ban imports of Chinese energy storage systems (ESS). Representative Greg Steube recently put forward the Countering Harmful Adversarial Recharge and Generation Energy Act (CHARGE). This legislation aims to halt imports of energy storage devices manufactured using technology from companies established under Chinese law or subject to Chinese Communist Party control and surveillance. Violations could result in up to five years imprisonment or fines of up to $250,000.
Industry insiders believe this bill primarily targets companies like CATL and BYD, which currently dominate about 80% of the U.S. ESS market. Despite high tariffs of over 40% on Chinese ESS batteries, analysts suggest these measures have been insufficient to reduce their U.S. market share significantly.
This legislative push follows a U.S. Supreme Court ruling that declared the Trump administration’s reciprocal tariffs illegal. The industry had previously expressed concerns that the court’s decision to lower tariffs on Chinese ESS batteries from 48.4% to 43.4% could further enhance their price competitiveness.
Even with tariffs still exceeding 40%, Chinese manufacturers maintain a low-cost production structure, bolstered by government subsidies and large-scale manufacturing capabilities. Even a slight reduction in tariff burdens could swiftly lower effective prices in the U.S. market.
As discussions continue regarding additional tariffs based on Section 232 and related legislation, the industry anticipates increased focus on the price competitiveness of Chinese batteries. However, some experts predict that intensified U.S. efforts to contain China could create long-term opportunities for Korean companies.
K-battery firms that have been expanding their U.S. production could stand to benefit. Companies like LG Energy Solution, Samsung SDI, and SK On are not only ramping up their ESS businesses but also accelerating the expansion of their North American production bases to navigate the slowdown in the electric vehicle market. By manufacturing locally, these firms can leverage the U.S. Advanced Manufacturing Production Credit (AMPC) to boost their price competitiveness.
Moreover, if the U.S. imposes additional tariffs or import restrictions on Chinese batteries, demand could shift to Korean companies, which face comparatively lower regulatory burdens. An industry insider noted that as supply chains are restructured away from China, Korean and Japanese firms could emerge as viable alternatives.
However, experts both inside and outside the industry emphasize that policy volatility remains the greatest risk. Another industry representative said that when judicial rulings overturn an administration’s policy push, it creates significant burdens for companies. The representative added that changes to the tariff system force firms to fully reassess purchasing plans, cost calculations, and investment schedules, further amplifying uncertainty.
The proposed bill to regulate Chinese batteries is still in its early stages and could undergo substantial changes during the legislative process. While a complete ban on Chinese ESS battery cell sales in the U.S. would clearly benefit domestic companies, more limited regulations or the inclusion of exceptions could temper these advantages.
Ultimately, the extent of benefits for K-batteries will depend on the U.S. trade policy stance toward China and the actual implementation of tariff and legislative measures. The industry emphasizes the need to balance expectations with caution until definitive policies emerge, closely monitoring developments.