Daily Management Review

Tesla advocates waiving duties on graphite imports from China to the US


Elon Musk's Tesla and SK Innovation, the world's largest car battery maker, have requested the US Trade Representative (USTR) for an exemption from customs taxes for importing graphite into the US. According to CNBC, the substance is essential for the creation of lithium-ion batteries for electric vehicles.

"No entity in the United States is now capable of creating artificial graphite to the requisite specs and capacity required for production," Tesla said in response to the USTR's three demands. SK Innovation, through its subsidiary SK Battery America, also backed an extension of the graphite tariff-free zone.

The exemption from the increased customs taxes "would allow SK to establish quality breakthrough electric car components at competitive pricing for US manufacturers, while generating full-time employment that support American families," according to the electric vehicle battery business. The duty exemption would assist SK Innovation's $11.4 billion joint venture with Ford and a $2.54 billion project in Georgia, according to the company.

Car costs are rising as a result of increased customs taxes imposed during the Trump administration's trade dispute with China. Temporary exemptions from certain of these tariffs granted by the government will expire at the end of 2020 or early 2021. Industry requests may push President Joe Biden's government to eliminate 25% tariffs on artificial graphite, as well as other materials and components, imported from China. The United States Trade Representative (USTR) announced in October that it would explore restoring tariff exemptions on a case-by-case basis, particularly for goods that can only be acquired from China.

source: cnbc.com