Battery technology could be one of the major casualties of US President Donald Trump’s sweeping new “Liberation Day” tariff package. The measures, which impose across-the-board import taxes, disproportionately target Southeast and East Asian economies that are critical suppliers of minerals and components essential to the global clean-energy industry.

While the baseline tariff is set at 10%, many Asian countries face significantly higher rates. Cambodia, for instance, has been hit with a 49% tariff, compared with 20% for the European Union. Despite sending just $820mn in clean-energy goods to the US last year – versus the EU’s $25bn – Cambodia’s exports represented 9% of its US trade, far exceeding the EU’s less than 1%, according to BloombergNEF data.

The tariffs are expected to substantially raise costs and complicate sourcing for battery inputs that the US does not produce domestically. Around 85% of all materials used in US-made batteries are currently imported.

Chile is a global leader in lithium production and was hit with the base-rate 10% tariff and is also heavily reliant on the export of copper and agricultural products. The global leader in lithium exports is Australia, also hit with 10% tariffs, with 86,000 tonnes a year, followed by Chile (44,000 tpy) and China (33,000 tpy) in 2024.

BloombergNEF estimates suggest the tariffs will increase prices for storage batteries by 17.5% by 2026, exacerbating the cost pressures already introduced under former President Joe Biden. The primary chemistry used in grid-scale batteries – lithium iron phosphate (LFP) – relies heavily on Chinese supply chains.

China, which provides 90% of the world’s rare earth metals, responded to a 34% US tariff by imposing an equivalent levy on American goods and restricting exports of seven key rare earth elements. President Trump stated on April 7 that he may raise tariffs on China by an additional 50% unless Beijing reverses course.

While lithium-rich Chile recently announced its reserves may be 25% larger than previously estimated, this is unlikely to offset the immediate disruption. Virtually all battery separators, 83% of cathodes, and 67% of anodes required for US demand in 2025 will need to be imported, BNEF projects.

Not all sectors will be equally affected. The US maintains a robust domestic supply chain for onshore wind and has a stockpile of approximately 50 GW of solar panels imported prior to the tariff announcement, offering some temporary relief.

Analysts warn the greatest threat may not be tariffs but geopolitical disruption to a long and complicated multi-country supply chain that is particularly vulnerable to trade disruptions.