The United States International Trade Commission (USITC) has determined that imports of active anode material from China, allegedly sold in the U.S. at what it claims to be unfairly low prices subsidized by the Chinese government, are likely hindering the growth of the domestic industry.

Following this decision, the U.S. Department of Commerce will continue its investigations, with a preliminary countervailing duty determination expected by March 13, 2025, and a preliminary anti-dumping duty determination around May 27, 2025.

In December last year, the American Active Anode Material Producers (AAAMP) submitted petitions to the Department of Commerce and the USITC, advocating imposing 920% tariffs on natural and synthetic graphite imports from China used for producing lithium-ion (Li-ion) battery anode material.

Active anode material is a key component in Li-ion batteries, which power electric vehicles, consumer electronics, medical devices, and other applications. AAAMP called for anti-dumping and countervailing duties to address the impact of low-priced imports.

Currently, most Chinese graphite imports are subject to a 25% tariff, which AAAMP argues is insufficient. Experts suggest China could absorb an additional 25% in costs even with a 920% tariff.

According to recent data, China’s battery industry overcapacity has surged to four times the demand, driven by state-sponsored industrial policies, low or non-existent wage protections, and weak environmental regulations.

AAAMP alleged that China’s ability to overproduce goods is part of a deliberate strategy enabled by extensive subsidies and financial incentives provided by the Chinese government.

Anti-dumping duties are intended to counteract the sale of products at unfairly low prices in the U.S., with the Department of Commerce calculating the dumping margin. Countervailing duties offset subsidies provided by foreign governments to industries. The USITC determines whether unfairly traded imports have caused material injury or hindered the establishment of a U.S. industry.

The full investigative process is expected to take approximately a year, with final determinations on dumping, subsidies, and industry impact anticipated by late 2025. Duties may be applied to active anode material imports after preliminary determinations.

The USITC will assess whether Chinese graphite is being sold below fair value and whether the Chinese government is subsidizing its production. Additionally, the Commission will determine whether these imports have materially injured or hindered a U.S. industry’s growth.

If the Department of Commerce and USITC investigations confirm these findings, Commerce may impose additional tariffs to offset the unfair pricing practices.

Last October, the U.S. imposed anti-dumping duties at rates ranging from 2.02% to 376.85% and countervailing duties at rates ranging from 1.44% to 168.81% on aluminum extrusions imported from 14 countries, including India.