Trump’s looming tariffs on EV battery materials could shake South Korea’s key industries, are we witnessing a shift in the global EV supply chain?

December 18th 2024

Credit: Korea Times

In Summary:

South Korean battery producers, including POSCO, EcoPro, and LG Chem, are facing significant disruptions as reports emerge that the incoming Trump administration may impose tariffs on all EV battery materials globally. These tariffs, which aim to curb China’s dominance in the battery and EV sectors, are expected to raise production costs for Korean manufacturers who rely heavily on Chinese raw materials.

The fallout has been immediate, with South Korean stock prices for battery material and component producers plummeting - POSCO Future M fell 8.24%, while others like EcoPro BM and Lotte Energy Materials also experienced sharp declines. Industry experts predict that higher tariffs will increase the costs of producing batteries and EVs, potentially slowing down global demand for electric vehicles.

While there is speculation that U.S. allies like Korea could secure exemptions, uncertainty remains. Could this trade shift push Korean firms to relocate production to the U.S.? How will this impact global EV markets, particularly as China intensifies competition outside of U.S. borders? This situation underscores a critical question: Is the global EV supply chain on the verge of a geopolitical realignment, and what will this mean for sustainability goals and eco-friendly vehicle affordability worldwide?

Read the full article at: Korea Times - POSCO, EcoPro, LG hit by looming Trump tariffs on battery materials