The battery industry, which has been most dependent on global supply chains, especially in China, is finally turning around. In a rather surprising but welcome development, tariffs on battery products between China and the United States have been suspended for 90 days. This is welcome news for developers, investors, and manufacturers, many of whom have been under severe stress from trade tensions.
The first 100 words are enough to tell it all: the battery industry is set to stabilize in the near term and realign in the long term.
Why tariffs matter: Battery industry pain points
The supply chain for batteries has been bumpy over recent years, and it is so especially because:
The United States has imposed very high tariffs on Chinese imports of batteries, which were as high as 145% at one point.
China retaliated with tariffs as high as 125% on US goods.
Tariffs have left project financing and timetables in doubt.
The prices of components have been rising, and clean energy projects have stalled due to high costs.
These fees directly affect battery energy storage systems (BESS). If all the elements are considered, the tariff rate can rise to 245%. Developers face escalated costs and uncertain policy, and it is increasingly difficult to plan or finance energy storage projects.
90-Day Tariff Suspension: What Has Changed?
After Swiss trade talks, China and the United States agreed to temporarily ease tariff pressure. That is:
The United States reduced its tariffs on Chinese imports from 145% to 30%.
The tariffs on US products by China were reduced from 125% to 10%.
This new policy shall be effective for 90 days, mainly to give a buffer period for negotiations. The White House joint statement also explained that this policy shift shall have a direct impact on the clean energy and battery sectors.
Reaction of the battery industry: Will the supply chain rebound?
The battery industry has now begun to acclimate to this new trend. The importation of lithium-ion batteries from China into America increased by 10% between the fourth quarter of 2024 and the first quarter of 2025, according to the Clean Energy Association (CEA). This means that everybody is preparing in advance for possible long-term trade issues and stockpiling.
"Look for a slowdown in building out projects, but there is enough capacity that everyone can wait it out awhile," said Daniel Finn-Foley of CEA. He went on to say that "developers can wait until the new tariff policy becomes clearer."
This short reprieve may have the following benefits:
Battery developers can plow through previously held-up projects.
Suppliers can take time to rebalance inventory at a lower cost.
Investor confidence in long-term market expansion has returned.
Rollout of energy storage will accelerate, especially in the United States' commercial and residential markets.
What’s at Stake: Long-Term Implications for the Battery Market
While the 90-day moratorium is a good thing, the longer-term future is uncertain. The primary issues are:
Will the tariffs come back in 90 days?
Can the United States and China come to terms on a long-term trade agreement?
Will new tariffs affect embryonic battery technology or raw materials?
But short-term benefits are at least fairly uncomplicated:
The cost of lithium-ion battery modules has decreased.
Cross-border trade movement of goods has become better.
Large-scale commercial and industrial (C&I) and utility energy storage projects have been rendered more viable.
Industry mood has also picked up, and the innovation vs. geopolitics equation looks rosier.
Prospects looking good for the future: What next for battery companies?
To seize this opportunity, battery developers and manufacturers can consider the following:
Accelerate project development: Use the 90-day tariff settlement window to advance projects rapidly.
Stock up: Ensure that you have enough stock of battery components to ride out any supply disruptions.
Watch policy dynamics: Track ongoing policy discussions to see if there are signs of long-term fixes.
Diversify supply chains: Do not put all your eggs in one basket. Besides China, you can also consider supply chains elsewhere in the world to enhance your ability to ride out risks.
In short, despite there being so many unknowns in the future, short-term opportunities are still worth taking!
Conclusion: A Critical Window of Opportunity for the Battery Industry
The 90-day tariff truce between China and the United States is a breathing space for the battery industry. While it may not solve all problems, at least it will allow companies to take a breath, reassess their tactics, and get ready for the next step, whatever that happens to be.
Whether this marks the beginning of a thaw in trade tensions or just a short-term truce, one thing is clear: the battery industry must use this moment to strengthen its position and prepare for a more electrified future in the long term.
