Transitioning to a U.S. Republican Administration and the Impact on Syrah Resources

With the transition to a second Trump Republican administration in the U.S., there will be positive and negative impacts on the graphite market and Syrah Resources. Given the high dependency on China for graphite and anode materials in the U.S., policies under the Republican administration have the potential to significantly change dynamics for ex-Chinese suppliers to the U.S. market. Two key policy changes that will affect the ex-China graphite and anode industry are: higher tariffs on imports, particularly from China, and reversal of demand support mechanisms for the electric vehicles (EV) under the Inflation Reduction Act (IRA) via repeal of legislation. Prior to the inauguration of President Trump, the Biden administration is focused on finalising loan commitments, awards and obligating funds for key programs under the IRA. Multi-billion conditional loan commitments from the DOE to U.S. EV and battery manufacturing projects of Rivian and StarPlus (Stellantis and Samsung SDI joint venture) have been announced since the election result.

During his first term, the Trump administration-imposed tariffs on Chinese product imports into the U.S., including on graphite products. In his re-election campaign, he proposed raising these tariffs to 60%, raising concerns among U.S. auto OEMs that depend on Chinese graphite supply in batteries for EV production. Protectionist measures would strengthen the competitiveness of ex-China supply chains and address unfair trade practices within the China anode supply chain.

The Trump administration has announced plans to impose an additional 10% tariff on all Chinese imports immediately following the January 2025 inauguration. This new tariff would be on top of the existing tariffs already in place. Given that a 60% tariff had previously been proposed, it is believed that the 10% is just a small part of a broader, more significant tariff package targeting Chinese imports.  Currently, a 25% tariff is effective for natural and synthetic AAM and a 25% tariff on natural graphite and spherical graphite imports from China will become effective from 1 January 2026. Trump’s relationship with Tesla CEO Elon Musk adds complexity to this issue, as Musk's support for Trump could influence policy decisions, particularly regarding sourcing materials for EV production. U.S. automakers, including Tesla, have historically lobbied against tariffs on graphite due to the lack of sufficient domestic supply.

In an apparent escalation in trade tensions, China’s Ministry of Commerce recently introduced permanent export license controls and revised the export tax rebates on certain products including graphite, effective from 1 December 2024, making it more expensive for suppliers to export products from China. In December 2024, the Ministry of Commerce tightened end-user and end-user vetting processes for licenses to export graphite to the U.S., as well as banned exports of gallium, germanium, antimony, and superhard materials to the U.S. There is a significant risk of China trade retaliation to any policies of the Trump administration that adversely affect China.  

There is bipartisan support for funding and incentives under the IRA, which are necessary to sustain the U.S. EV and battery industry, economic growth, investment and jobs across the country. While Trump may seek to roll back some of Biden’s clean energy policies during a second term, a full repeal of IRA provisions seems unlikely. The IRA has already allocated significant financial support to the EV and battery supply chain in the U.S., particularly in Republican states and certain Republican senators have vocally resisted substantive changes to it. Widespread changes to the IRA are not likely to be supported by all Republican senators making it challenging to get through Congress. Continued tax credits for battery manufacturers and auto OEMs in the U.S. will support demand for graphite and anode material, especially in the battery market. Syrah expects IRA production tax credits under the IRA will continue under the Trump administration, and adding FEOC restrictions on such credits is promoted by key members of the Trump administration. However, it is widely expected that the Section 30D consumer tax credit will be repealed, given the significant opportunity cost associated with it. Repealing  Section 30D of the IRA would not occur before late 2025 considering the procedures required before Congress could pass such changes

Impact on Syrah Resources

There is likely to be positive and negative impacts on Syrah Resources of changes in critical minerals and EV/battery supply chain policy under the new Trump administration. As the only vertically integrated natural graphite active anode material supplier in the U.S., Syrah Resources is positioned to benefit from the telegraphed policy positions, with immediately higher tariffs on imports of Chinese graphite, other critical minerals, batteries and EVs countering the negative impacts on EV adoption in the U.S. from potential changes to consumer support mechanisms such as Section 30D.

Watch below Syrah Resources’ Managing Director & CEO, Shaun Verner discussing the potential impacts of the US election result on the graphite industry here: View video