China Energy Storage Network News: Recently, U.S. President Trump announced the globally watched "reciprocal tariffs."

 

The Trump administration will impose tariffs at different levels on all trading partners, planning to impose a 34% tariff on China, and tariffs ranging from 20% to 49% on trading partners including the EU, Vietnam, Taiwan, Japan, India, South Korea, Thailand, Switzerland, Indonesia, Malaysia, Cambodia, etc. The minimum reciprocal tariff rate for any trading partner will also be 10%. Among them, the 10% "base tariff" will take effect at 12:01 AM Eastern Time on April 5, and the higher "reciprocal tariffs" for specific countries will take effect at 12:01 AM on April 9.

 

The new tariffs have shocked various sectors of the global market, from fossil fuels to renewable energy, from fuel vehicles to new energy vehicles. However, the impact varies across industries. For example, the relative tariff increase on batteries is much greater than on photovoltaics. Compared with onshore wind and photovoltaics, the deployment of stationary energy storage and new energy vehicles is more likely to be hit.

 

 

Tariff increases exceed expectations

 

According to documents presented by the White House, the U.S. will impose a 34% reciprocal tariff on Chinese products. Combined with previous base tariffs, Section 301 tariffs, and general tariffs on China, the final tariffs on major export commodities are as follows:

The detailed tariff rules for key products such as energy storage cells, energy storage systems, and power tools are as follows:

(1) 2025 energy storage batteries: base tariff (3.4%) + 301 tariff (7.5%) + general tariff (20%) + reciprocal tariff (34%) = 64.9%

(2) 2026 energy storage batteries: base tariff (3.4%) + 301 tariff (25%) + general tariff (20%) + reciprocal tariff (34%) = 82.4%

(3) Power tools: 301 tariff (7.5%) + general tariff (20%) + reciprocal tariff (34%) = 61.5%

 

It can be seen that the new tariffs will raise the import tariff on China's stationary energy storage batteries to 64.9%. Although the new tariffs will narrow the gap with the estimated U.S. production costs, U.S. battery production will be insufficient to meet domestic demand—especially for the stationary energy storage industry relying on LFP. The final result is that energy storage system costs will slow down the growing U.S. energy storage market.

 

If a 34% tariff is imposed on goods from China, the cost of a four-hour turnkey system in the U.S. in 2025 will increase by 17%. Due to higher-than-expected costs, some U.S. energy storage project developers and buyers may consider delaying or canceling early projects.

 

In addition, starting January 1, 2026, the Section 301 tariff will increase from 7.5% to 25%, making the final tariff on energy storage batteries as high as 82.4%.

 

How will Chinese companies respond to the impact?

 

According to Bloomberg New Energy Finance estimates, to meet local U.S. demand in 2025, almost all battery separators, 96% of photovoltaic cells, 83% of battery cathodes, and 67% of battery anodes will need to be imported, as domestic production capacity cannot quickly expand to fill the gap.

 

Since the U.S. market has always been a highly profitable market for China's new energy industry and accounts for a large share of global demand, the U.S. tariff increase will have a huge impact on China's new energy industry. The main impacts of the new tariffs on China's new energy industry are twofold: first, who bears the tariff cost. If most is borne by U.S. customers, the gross margin decline of Chinese new energy companies will be limited. On the other hand, after the tariff increase, the actual local selling price of lithium batteries, energy storage, and photovoltaic products will rise, reducing economic viability and possibly suppressing some demand. In the long term, expanding production locally in the U.S. may be the most effective way to cope with this round of tariff shocks.

 

Lithium batteries: decentralized factory construction and technology licensing may be the optimal solution

 

The U.S. market accounts for about 12% of global lithium battery demand. With Section 301 tariffs combined with reciprocal tariffs, the total tariff on power batteries reaches 73.4%, energy storage batteries 64.9% in 2025, and 82.4% in 2026. On the power side, affected by subsidy thresholds set by the Biden administration, U.S. automakers have basically stopped importing power batteries from China, so the impact of this round of tariffs is small; on the energy storage side, the U.S. basically purchases Chinese iron lithium cells, and the tariff increase may affect short-term demand. Experts believe that based on Chinese companies' mastery of core battery technologies (such as iron lithium processes) and cost advantages (currently 40% lower than Korea), decentralized factory construction and technology licensing models are feasible solutions.

 

Energy storage: project IRR may significantly decline, local manufacturing in the U.S. is an effective countermeasure

 

For energy storage, considering the reciprocal tariffs, China's export tariffs to the U.S. have reached 64.9%. Since most orders signed by Chinese energy storage companies are FOB prices excluding tariffs and other costs; and most U.S. local integrators still need to import cells from China, costs will also rise. Therefore, the main tariff costs of energy storage companies can still be passed on to downstream customers, but this means energy storage prices will rise, leading to a decline in the IRR of U.S. energy storage projects. It is expected that energy storage companies will mainly adopt local manufacturing to avoid high tariffs in the future.

 

Photovoltaics: significant marginal impact on capacity in Indonesia and Laos, global supply chain globalization is urgent

 

China's local exports to the U.S. have always been subject to anti-dumping + countervailing + Section 201 + Section 301 tariffs, with high rates. After the U.S. conducted anti-dumping investigations on four Southeast Asian countries in 2024, direct exports from these countries to the U.S. also face high tariffs. Subsequently, Chinese companies procured batteries from Indonesia and Laos, processed them into modules in the four Southeast Asian countries, and then exported to the U.S., or entered the U.S. market by building factories locally. After this tariff increase, battery capacity in Indonesia and Laos is significantly impacted. Domestic companies may subsequently build factories in regions with lower tariffs (such as the Middle East) or in the U.S. to avoid high reciprocal tariffs.

 

The tariff war will reshape the global industrial chain pattern

 

The Trump administration's carefully crafted tariff combo is igniting a silent energy war on the global renewable energy front, with ripple effects that will reshape the global renewable energy industry landscape.

 

The role of Southeast Asia as a "stepping stone" for Chinese energy storage companies looking to expand overseas is now being weakened. Battery factories backed by Chinese investment in countries like Vietnam and Thailand are facing a double bind: soaring export tariffs to the U.S., which have surged by 48%–49%, coupled with increased import tariffs on Chinese raw materials, leaving these facilities caught between rising costs on both ends.

 

The European market, meanwhile, is showing a trend of "short-term观望 (wait-and-see approach) and long-term substitution." According to data from the European Energy Storage Association, if China's supply chain were to completely withdraw, energy storage project costs in Europe would surge by 40%, while installation schedules would be delayed by 2 to 3 years. This "strategic dependency" has left Europe caught in a cycle of policy uncertainty.

 

Japanese and South Korean companies will leverage their policy and technological advantages to forge new competitive strengths. For instance, Samsung SDI has capitalized on subsidies from the U.S. Inflation Reduction Act, enabling it to offer energy storage products at prices 15% lower than comparable Chinese offerings at the end consumer level. Meanwhile, Panasonic Electric has recently launched a fully automated production line for its 4680 batteries in Osaka, driving down the investment cost per gigawatt-hour to 60% of that seen among its Chinese counterparts.

 

Faced with the tariff storm, China's energy storage industry must launch a multifaceted battle for survival. After all, this strategic contest has already transcended the scope of a traditional trade war—it’s actually a struggle for leadership in the energy revolution, and more importantly, it’s about reshaping the foundation of trust within the global industrial chain.

 

In the future, Chinese enterprises will need to flexibly adjust their strategies amid policy dynamics, leveraging innovation and supply-chain collaboration to tackle challenges head-on. At the same time, they must seize opportunities in emerging markets to strengthen their global competitiveness. For instance, the European Union’s expansionary fiscal stimulus policies could boost demand for energy storage systems, while China’s energy partnerships along the Belt and Road Initiative also offer an alternative pathway for exporting energy-storage solutions. As countless historical examples have shown, it is often the toughest rules that give rise to the most resilient champions—so perhaps this tariff crisis could very well mark a new starting point for China’s renewable-energy sector to break through existing barriers.

 

The United States will undoubtedly deploy a range of tools beyond tariffs in its next move.

 

Experts believe that the current stage of this major tariff showdown unfolds as follows: Phase One (February-March 2025): The opening act of the tariff博弈; Phase Two (April 2025): The tariff博弈 escalates across the board; Phase Three (after April 2025): The phase of differentiated tariffs.

 

In February 2025, immediately after taking office, Trump initiated the first round of tariff negotiations. At that time, the additional tariffs were imposed solely on Mexico, Canada, and China, with the targeted products largely concentrated in strategic industries. Meanwhile, the U.S. resorted to verbal threats of tariffs against its key trading partner, the European Union. This initial wave of tariff talks can be seen as a classic opening act.

 

On April 2 (U.S. Eastern Time), Trump, during his remarks on the imposition of reciprocal tariffs, noted that there remains room for future adjustments in both tariff rates and scope. Any upcoming changes in tariff levels will depend on whether trading partners can reach a full consensus with the U.S. on economic and national security issues—or, alternatively, on whether retaliatory tariffs are imposed. Meanwhile, as for China and other emerging economies that have historically served as trade gateways, the second wave of tariff negotiations could lead to comprehensive additional tariffs, laying the groundwork for potential bilateral tariff adjustments down the road.

 

In the upcoming third round of differentiated tariff negotiations, some institutions predict that the U.S. will employ a variety of tools beyond tariffs themselves, aiming to establish a new set of global trade rules that better align with American interests. These rules could involve refining the existing framework under the WTO, revising traditional bilateral and limited-multilateral trade agreements, or even forging entirely new small-scale multilateral or bilateral trade arrangements. Practically speaking, the U.S. will likely continue its approach of issuing announcements, implementing countermeasures, escalating disputes—or pursuing reconciliation—methods. This process is expected to introduce two major uncertainties worldwide: opaque tariff regulations and unpredictable production and manufacturing outlooks.

 

The Chinese government is expected to introduce countermeasures.

 

Industry insiders believe the tariff war will restrict China's direct and indirect exports of new energy products to the U.S. (for instance, via re-export trade through Southeast Asia, Mexico, and other regions), further exacerbating domestic overcapacity. Moreover, the pressure from this excess capacity—built up due to the tariff battle—on the domestic market will inevitably manifest in downward trends in market prices. As a result, under these uncertain future conditions, the valuation of existing new energy assets is also likely to decline.

 

After the tariff war has hindered domestic exports of new energy products, companies in the upstream and downstream industries linked to exports may see their revenues decline, which could subsequently impact the domestic consumer goods market. At the same time, this situation may also affect the durable consumer goods and real estate markets, putting local governments under dual pressure: a slowdown in both GDP growth and tax-related revenue.

 

At the same time, as economic leverage tools for local governments, various platform enterprises will also face increased pressure, since real estate and manufacturing-related economic models remain the primary business directions and financing bases for city-level platform companies across all tiers. Moreover, from the perspective of boosting exports and countering the EU's carbon tariff barriers, export-oriented manufacturing industries will require complementary zero-carbon parks and zero-carbon industrial chains—creating an objective need for greater demand in the renewable energy sector.

 

Additionally, considering the debt-reduction pressures faced by platform companies and the growing need for transformation into new businesses, the new energy industry—driven by a zero-carbon economy—is an even better choice. Industry insiders predict that this year, both the central government and local governments will continue to introduce a series of incentive policies aimed at promoting the development of zero-carbon economies, zero-carbon parks, integrated source-grid-load-storage systems, and virtual power plants, in order to address the ripple effects brought about by the U.S. tariff war on the domestic market.

 

Source: China Energy Storage Network | Author: Pan Wang