牛津經(jīng)濟(jì)研究院-促進(jìn)北美石墨的增長(zhǎng)-北美石墨聯(lián)盟報(bào)告（英）-2024.2

ENABLING

NORTHAMERICANGRAPHITEGROWTHAREPORTFOR

THENORTHAMERICANGRAPHITE

ALLIANCEFEBRUARY

2024ABOUT

OXFORDECONOMICSOxfordEconomicswas

foundedin1981asacommercialventurewithOxfordUniversity’sbusinesscollegetoprovideeconomicforecastingandmodellingto

UKcompaniesandfinancialinstitutionsexpandingabroad.Sincethen,we

havebecomeoneoftheworld’s

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akeyadvisertocorporate,financialandgovernmentdecision-makersandthoughtleaders.Ourworldwideclientbasenowcomprisesover

2,000internationalorganizations,includingleadingmultinationalcompaniesandfinancialinstitutions;keygovernmentbodiesandtradeassociations;andtopuniversities,

consultancies,

andthinktanks.FEBRUARY2024Alldatashownintables

andcharts

areOxfordEconomics’owndata,exceptwhereotherwisestatedandcitedinfootnotes,and

arecopyright?OxfordEconomicsLtd.Themodelling

andresultspresentedhereare

basedon

informationprovidedbythirdparties,uponwhichOxfordEconomicshas

relied

inproducingitsreportandforecastsingoodfaith.

Anysubsequentrevisionorupdateofthosedatawillaffectthe

assessmentsand

projectionsshown.Todiscussthereportfurtherpleasecontact:HamiltonGalloway:hgalloway@OxfordEconomics5HanoverSq,8thFloorNewYork,

NY10004Tel:+1646-786-1879TABLEOF

CONTENTSExecutivesummary41.Introduction62.Theglobalgraphitemarket72.1Graphitedemand

72.2Graphitesupply

82.3Anodematerial113.Rationalesfortradeaction163.1Infantindustryprotection173.2Unfairtradepractices

193.3

Strategicprotection244.GraphiteandSection301Tariffs

284.1Section301tariffs

in

2018284.2Chineseexportrestrictionsongraphite

294.3ArgumentsforrenewedSection301tariffsonChinesegraphite

295.Conclusion31EXECUTIVESUMMARYTHEGLOBALGRAPHITEMARKETGlobaldemandforgraphite

hasexpanded52%inthe

lastfive

yearsandisexpectedtogrowanother70%overthenextfiveyears.Thisdemandgrowthhas

largelybeendrivenbyincreaseddemandforlithium-ionbatteries(LiBs),drivenbyelectricvehicleproduction.Demandforanodematerial—theformofgraphiteusedinLiBs—isprojectedtoalmosttripleinthe

nextfive

years.Chinacurrentlydominatestheglobalgraphitemarket,

and,barring

concertedaction,

itwillcontinuetodoso.AccordingtoforecastsbyBenchmarkMineralIntelligence,

Chinasupplied72%ofallgraphitein2023andisprojectedto

supply65%ofallgraphitein2028,.Chinaaccountsforanevenlargershareofthemarketforthehigh-puritygraphiteanodematerialusedinbatteries.

In2023,Chinacontrolled92%ofthismarket,andit

isforecasttoaccountfor86%oftheanodematerialmarket

in2028,accordingtoBenchmark.Chinadominatestheproductionofbothnaturalgraphite,whichisminedfromthegroundandlaterrefinedintoanodematerial,aswellassyntheticgraphite,whichismanufacturedfrompetroleum.AccordingtoBenchmark,China’s

supplyofanodematerial

exceededglobaldemandby32%in2023;howeverglobaldemandisgrowingsoquicklythatit

willcatchup

tothissupplyby

2024.

Becauseofthisrapidlyrisingdemand,

China

continuestoinvestin

graphitemanufacturingdespiteits

currentovercapacity.Thepriceofanodematerialmadefromsyntheticgraphitefellby24%

from2022to

2023andisexpectedtofallby38%fromits2022peak

by2026.Thisrapidfallinpricesandtheconvergenceofthepriceof

syntheticgraphitewiththat

ofnaturalgraphiteisindicativeof

Chinasellingitsoversupplyofgraphiteatpricesthatdonotreflectthe

full

costofproduction.RATIONALESFORTRADEACTIONThegeneral

economicargumentforfreetradeiswell

established;however,tradeprotectionscanbejustifiedunderseveralconditions:1)

Infantindustryprotections

arejustifiedwhen

nascentindustriesfacecostdisadvantagesowingtoincreasedscaleby

establishedplayers,ordecliningcostsfromlearningby

doing.NorthAmericangraphiteproducersface

significanthurdlestoobtaininginvestment

inthefaceofexcessChinese

capacityingraphitemanufacturing.SecuringareliablesourceofgraphiteisalsocriticaltothesuccessofthegrowingNorthAmericanLiBandEVmanufacturingsectorsas

well.2)

Tradeprotectioncanbejustified

asaresponseto

unfairtradepractices

bytheexporter,includingdumping,governmentsubsidies,unfairand

harmfulregulation,

andforcedtechnologytransfer.

Chinahasalongandwell-documentedhistoryofthesepracticesacrossanumberofgoods,forexample,inthecaseofphotovoltaicsolarpanelsin

the2010s.Chineseovercapacityingraphiteproduction,combinedwiththefallingpriceofgraphitein

recentyears(thepriceofnaturalgraphitefell18%in2023,while

thatofsyntheticgraphitefell24%)4EnablingNorthAmericanGraphiteGrowthsuggestthatthepriceatwhichChinais

sellinggraphitehasdecoupledfromthecostofproduction.3)

Strategicprotections

can

bejustifiedbasedonnationalsecurityconsiderations.

LiBsareacriticalcomponentofmany

emergingadvancedtechnologies,includingmanywithnationalsecurity

applications.Graphitehasbeendesignated

acriticalmineralforLiBproductionbythreeUSgovernmentagencies,andtheUSgovernmenthasmadesignificantinvestmentsthroughgrantsandtaxpolicychangesincludedintwo

U.S.laws,theInfrastructureInvestmentandJobsActin2021andthe

InflationReductionActin

2022,

inincreasingdomesticgraphiteproduction.4)

Poorlaborandenvironmental

practicesprovideanotherjustificationfortradeaction,bothtolimittheunfairadvantagethatfirmswith

suchpractices

enjoy,

aswellas

todiscouragethepracticesthemselves.

Chinesegraphiteproducersgenerate

substantialcarbon

emissionsowingtoinefficientindustrialprocessesand

anoverrelianceondirty

energysourcessuch

ascoal.Theyhavealsobeenlinkedtostate-sponsored

“l(fā)abortransfer”programsaffectingworkersin

theUighurAutonomousregionthathavebeendescribed

asforcedlabor.GRAPHITEANDSECTION

301TARIFFSStartingin2018,theUShasappliedtariffs(raisedto25%in2019)on

approximately$500billionofChinesegoods,includingmanyproductsmadefromgraphite

under

section301oftheTradeActof1974.Thesetariffswerenotspecifictographitebutwerepartofabroadertariffpackagein

responsetounfairtradepracticesbyChina.However,in

2020,

theUSTrade

RepresentativeapprovedarequestfromEVmanufacturersto

exemptmostgraphiteanodematerialusedinbatteriesfromthese

301tariffssincemanufacturersarguedthattheywereunabletosourceanadequatesupplyofgraphite

fromnon-Chinesesources.WhileBenchmarkforecastscorroboratetheChinesedominanceoftheglobalgraphitemarket,

thisraisesachicken-and-eggproblem:domesticgraphitemanufacturerscannot

secureexternalinvestmentsandmakethenecessary

internalinvestmentstoincreasetheirfutureproductionabsentprotectionfromChina’ssignificantovercapacityingraphitemanufacturing.Absenttheseprotections,therefore,itwillcontinueto

beimpossiblefordomesticLiBmanufacturerstoobtaingraphitefromnon-Chinesesources.EnablingNorthAmericanGraphiteGrowth1.INTRODUCTIONGraphiteisanon-metallicmineral,which,likecoal

anddiamond,isaformofpurecarbon.Graphiteisveryresistanttoheatandisrelatively

chemicallyinert,twopropertiesthat

makeit

usefulincertaintypesofmanufacturing.Traditionally,graphitehasbeeninhighdemandinthe

steelindustry,whereitisusedinrefractories(bricksthatlineblastfurnaces),

andforelectrodesinelectricarcfurnaces;as

wellasinanumberofotherindustrialprocesses.Graphiteisalsoacrucialcomponentoflithium-ionbatteries(LiBs),makingupabout

30%ofLiBsbyweight,

butaccountingforonlyabout

12%oftheircost.

Therecent

andprojected

expansioninthe12demandforLiBshas

resultedinamassiveincreasein

bothdomesticandglobaldemandforgraphite.AccordingtoforecastsbyBenchmarkMineralIntelligence,

thedemandforgraphiteisexpectedtogrow70%inthenextfiveyears,while

thedemandfor

graphite-derived

anodematerialusedinbatteriesisexpectedtonearlytriple.

EnsuringareliablesupplyofgraphiteiscriticalforthemanufactureofLiBsandfor

theproductionofelectricvehicles(EVs),whichareexpectedtoincreasinglydominateautomobileproductionin

thecomingyears.Thisreport,whichwascommissionedby

theNorthAmericanGraphiteAlliance,a

coalitionofNorthAmericangraphiteproducers,reviewstheeconomicsof

theglobalgraphitemarket,theargumentsfortraderestrictionsinNorth

America,and

therecentinstitutionaltradecontext.Theremainderof

thepaperisorganizedasfollows:??Chapter2presentsaquantitativeoverviewoftheglobalgraphitemarket.Chapter3discusses

theeconomicrationaleforprotectingNorthAmericangraphiteproductionagainstcompetitionfromChinesegraphiteimports.Chapter4reviewsthistradehistory.??Chapter5concludes.1

See,forexample,/the-key-minerals-in-an-ev-battery/.TheWorldBankGroupestimatedthatgraphiteaccountsforapproximately54%byweightofthe“mineraldemand”neededforenergystoragethrough2050.SeeKirstenHund,DanieleLa

Porta,ThaoP.Fabregas,TimLaingandJohnDrexhage(2020).“MineralsforClimateAction:TheMineralIntensityofthe

CleanEnergyTransition.”/en/961711588875536384/Minerals-for-Climate-Action-The-Mineral-Intensity-of-the-Clean-Energy-Transition.pdf.2

See,forexample,/breaking-down-the-cost-of-an-ev-battery-cell/.Mostofthebattery’sanodeismadefromgraphite,whichaccountsformostoftheanode’sapproximately12%shareofthecost.EnablingNorthAmericanGraphiteGrowth2.THE

GLOBALGRAPHITEMARKET2.1GRAPHITEDEMANDGlobaldemandforgraphiteisrobustandhas

beenrisingoverrecentyears.

AccordingtodatafromBenchmarkMineralIntelligence,

demandtotaledapproximately3.6millionmetrictonsin2023(Fig.31).Thebulkofthisdemand

wasforthreeuses:

almosthalfisfor

electrodesusedin

steelproduction,morethanathirdforuseinbatteries,

and

around

atenthforrefractoryandfoundrymaterials.Othersmallerusesforgraphiteincludedexpandedgraphite,

whichis

usedasaflameretardant;carburization;frictionproducts;

andgraphiteshapes,lubricants,andcarbonbrushes.Fig.1.Globalgraphitedemandbyuse,2023Frictionproducts(1%)Expanded

graphite

(2%)Refractory

&foundryBattery(38%)Electrode(46%)20233,619(11%)Carburisation

(1%)Otheruses(1%)05001,0001,5002,0002,5003,0003,5004,000Thousands

ofmetric

tonsSource:

Benchmark

MineralIntelligence,Oxford

EconomicsGlobaldemandforgraphitegrewby52%overthe

five

yearsperiodbetween2018

to2023andisforecasttogrow70%overthe

five-yearperiodfrom2023-2028(Fig.2).Mostofthisgrowth(89%ofthegrowthover

thelastfive

yearsand85%oftheforecastgrowthoverthe

nextfiveyears)is

theresultofincreaseddemand

forgraphitein

batteryproduction.3

BenchmarkMineralIntelligenceforecasts,January2024.EnablingNorthAmericanGraphiteGrowthFig.2.Globalgraphitedemandbyuse,2018-2028Thousands

ofmetric

tons7,0006,167(+70%)Battery6,000Other5,0002,643(+17%)3,619(+52%)4,0003,0002,0001,00002,3792,252(+7%)3,525(+158%)2,1121,367(+412%)267201820232028Source:

Benchmark

MineralIntelligence,Oxford

Economics2.2GRAPHITESUPPLYTherearetwosourcesofgraphite:naturaland

synthetic.Naturalgraphiteismined

fromtheground

asflakegraphiteandlaterprocessedin

variouswaysdependingonthespecificchemicalpropertiesrequired.Syntheticgraphiteismanufacturedfrompetroleum

coke,whichisabyproductoftheoilrefinerybusiness.Typically,syntheticgraphiteis

ofahigherpuritythannatural,althoughnaturalgraphitecanbeprocessedtohighlevelsofpurity.

Syntheticgraphiteisalsotypicallymoreexpensivethannaturalgraphite.Forthisreason,syntheticgraphiteisusedinthe

twoapplicationsofgraphitethatrequirethehighestpurity:electrodesusedinsteelproduction,whichuseexclusivelysyntheticgraphite,andbatteryproduction,whichmakesuse

ofbothnaturalandsyntheticgraphite.Theotherendusesofgraphitedepictedin

Fig.1typicallyuseonlynaturalgraphite.In2023,approximatelytwo-thirdsofthegraphiteused

globallywassyntheticin

origin,withtheremainingthirdbeingnatural.Naturalgraphite’sshareoftheglobalgraphitemarketisforecasttoincreasemodestlyfrom33%in2023to38%in2028.EnablingNorthAmericanGraphiteGrowthFig.3.Graphitesupplybychemistry,2018-2028Thousands

ofmetric

tons8,0006,8627,000Natural6,0005,0004,0003,0002,0001,0000Synthetic62%3,6632,41667%66%38%33%34%201820232028Source:

Benchmark

MineralIntelligence,Oxford

EconomicsChinadominatesthesupplyofbothnatural

andsyntheticgraphite(Fig.4).In2023,Chinasupplied67%ofthenaturalgraphiteusedgloballyand75%ofthesyntheticgraphite;or72%ofgraphiteoverall.AccordingtoBenchmark’sforecast,China’sshareoftheglobalgraphitemarketisexpectedtofallonlyslightlyby2028,to65%,withitsshareofthesyntheticgraphiteincreasing

slightly.TheUS’sshareofgraphiteproductionisexpectedtoremainsteadyat3%from2023to2028,whileCanadaisforecasttoincreaseitsshareofglobalgraphiteproductionfromlessthan

1%to4%EnablingNorthAmericanGraphiteGrowthFig.4.GraphitesupplybychemistryandgeographyUSANaturalSyntheticTotal67%5%1,219CanadaChina75%2,4452,578MozambiqueMadagascarIndia3%72%3,663TanzaniaOtherNaturalSyntheticTotal41%4%80%4,2843%4%4%5%4%65%4%12%6,86201,0002,0003,0004,0005,0006,0007,0008,000Thousands

ofmetric

tonsSource:

Benchmark

MineralIntelligence,Oxford

EconomicsWhileChina’sstatus

asthelargest

producerofnaturalgraphitereflectssignificantdepositsinthecountry—approximately28%ofglobalgraphitereservesaccording

to

theUS

GeologicalSurvey(USGS)—severalother

countriesboastsignificantnaturalgraphitedeposits.However,graphitereservesin

theUS

arebelievedtobe

small(andarenotreportedby

theUSGS),

andotherNorthAmericandepositsaccount

foronlyabout3%ofglobal

reserves

(Fig.5).Fig.5.GraphitereservesMexico1%Canada2%Other19%China28%Tanzania280millionmetrictons6%Madagascar9%MozambiqueBrazil26%9%Source:

USGS,

Oxford

EconomicsEnablingNorthAmericanGraphiteGrowth2.3ANODEMATERIALInthissection,we

focusongraphitethathas

beenprocessedforuseinbatteries,

referredtoas“anodematerial.”

Thedemandforgraphiteanodematerialgrewjustover

six-foldfrom2018to20234andisexpectedtomorethantriplebetween2023and

2028,accordingtoBenchmarkforecasts(Fig.6).Mostofthatincreaseis

theresultofincreaseddemandforEVbatteries,althoughthedemandforenergystoragesystems(ESSorgridstorage)

andforportabledeviceslikecellphonesalsocontributedtotheincreaseddemand.Beyondourfive-yearforecastwindow,some

expertspredictthatgraphitedemandforESSmayexceeddemandfor

EVs.Fig.6.Anodematerialdemandbyenduse,2018-2028Thousands

ofmetric

tons3,5002,920(+189%)3,0002,5002,0001,5001,000500ElectricVehicles(EV)EnergyStorageSystems(ESS)Portables+30%+179%1,010(+506%)+205%+2,725%167+640%+39%0201820232028Source:

Benchmark

MineralIntelligence,

Oxford

EconomicsChinacurrentlyrepresentsjustoverhalf(52%)oftheglobaldemandforanodematerial,whichisessentiallyitsshareofthemarketformanufacturing

LiBs(Fig.7).China’sshareof

thisdemandisexpectedtofallmodestlyto43%by2028,withNorthAmerica’sshareof

theanodematerial

demandincreasingfrom16%to22%.However,

theseforecastsaredependentontheseregions’continuedabilitytoobtainthecriticalrawmaterialsnecessaryforbatteryproduction,includinggraphite.4

Naturalgraphiterequiressignificantrefiningtobeusedinbatteries.Inthis

refiningprocessfornaturalgraphite,approximatelyhalfthegraphitebyweightislost.Syntheticgraphiteismanufacturedtoneed,soitdoesnotexperiencethis

lossofmaterial.Carefulreadingofthefiguresinthis

chapterwillmakethis

clear.

Fig.2showsthat,in2023,thedemand

forgraphite(bothnaturalandsynthetic)inbatterieswasapproximately1.367thousand

metrictons.Fig.6,however,showsa2023demandforanodematerialof1,010thousandmetrictons.Thedifferencelargelyreflectsthelossofmaterialwhennaturalgraphite(whichsuppliesapproximatelyaquarteroftheanodematerial—seeFig.8)isprocessedintoanodematerial.EnablingNorthAmericanGraphiteGrowthFig.7.Anodematerialdemandbyregion,2018-2028Thousands

ofmetric

tons3,5002,920NorthAmericaChina3,0002,5002,0001,5001,00050015%EU21%Other1,01010%21%43%52%16%16722%0201820232028Source:

Benchmark

MineralIntelligence,Oxford

EconomicsIn2023,approximately24%

oftheglobalanode

materialsupplywas

madeupofnaturalgraphite,with74%beingsyntheticgraphite(Fig.8).Theremainderoftheanodematerialmarketwasmadeupofotheranodematerials,includinggraphite-silicon.Fig.8.Anodematerialsupply

by

chemistry,2018-20285Thousands

ofmetric

tons3,5003,0743,0002,5002,0001,5001,000500NaturalSyntheticOther3%75%1,4503%74%2756%28%22%66%24%0201820232028Source:

Benchmark

MineralIntelligence,Oxford

EconomicsChinadominatestheproductionofbothnaturalandsyntheticgraphiteanodematerial.In

2023,Chinaproducedapproximately79%oftheanodematerialmadefromnaturalgraphite,andapproximately97%oftheanodematerialmadefromsyntheticgraphite.

AccordingtoBenchmark,absentintervention,thesesharesareexpectedtofallonlyslightlyby2028,bywhichtimetheUSis

expected5

“Other”includesgraphite-silicon.EnablingNorthAmericanGraphiteGrowthtoaccountforabout3%ofglobalgraphiteanodematerialproduction,andCanadaforanadditional1%(Fig.9).Fig.9.Anodematerialsupply

by

chemistryandgeography,2023-2028NaturalgraphiteUSA79%346CanadaChinaSyntheticgraphite97%1,0664%SouthKoreaJapanAll92%3%

1,450Naturalgraphite72%681OtherSyntheticgraphite91%2,3031%2%All

3%86%3%

5%

3,07405001,0001,5002,0002,5003,0003,500Thousands

ofmetric

tonsSource:

Benchmark

MineralIntelligence,Oxford

EconomicsNotethat,in2023,the

supplyofanodematerialof1,450thousandmetrictons(see

Fig.8),significantlyexceededthedemandforanodematerial

of1,010thousandmetrictons(Fig.

7),accordingtoBenchmarkdata.Whilethislargediscrepancymayin

partreflectmeasurementissues,itisindicativeofoversupplyin

theanodematerialmarketinrecentyears,asChinahasinvestedtomeetexpectedfuturedemandforgraphite(seeFig.10).WhileChinesesupplyofanodematerialwasestimated

toexceedglobal

demandby32%in2023,demandisgrowingsorapidlythatitis

expectedtoexceed

China’s2023supplyof

anodematerialbytheendof2024.Thus,Chinacontinuestoinvestingraphitemanufacturing

despiteitsovercapacityin

anticipationofdominatingrapidlygrowingfuturedemand.EnablingNorthAmericanGraphiteGrowthFig.10.

Supply,demandforanodematerial,2021-2028Thousands

ofmetric

tons3,5003,000Globalsupply2,5002,0001,5001,000500ChinasupplyGlobaldemand020212022202320242025202620272028Source:

Benchmark

MineralIntelligence,Oxford

EconomicsThisChineseovercapacityintheproductionofanodematerialisreflectedinthepriceforanodematerialshowninFig.11.

Afterpeakingin2022,thepriceof

anodematerialfromnaturalgraphitefell618%in2023andisexpectedtofallby27%fromitspeakby2026.Thepriceofanodematerialfromsyntheticgraphitefelleven

more,by24%in2023,andis

expectedtofallby38%by2026.

Withinthiscategoryofhigh-capacitygradegraphiteanodematerial,

thepricepremiumforsyntheticgraphite—whichis

typicallymoreexpensivetomanufacturethannaturalgraphiteisto

extractandrefine—fellfrom25%in2022to15%in

2023

andisexpectedtofallto

5%by2025.Whileadetailed

analysisofthecostofproductionofanodematerialin

ChinaisnotpossibleowingtotheclosednatureofChineseindustry,thisrapidfallin

pricesandthe

convergenceofthepriceofsyntheticgraphitewiththatofnaturalgraphite—alongsidetheestimatesofChineseovercapacityshowninFig.11—isindicativeofChinaselling

graphiteatpricesthatdonotreflectthefull

costofproduction,aspartofan

efforttocapturefuturedemand,aswellas

todisposeofexcesssupply.Thisisdiscussedfurtherinthefollowingchapter,

especiallyinsection3.2onunfairtradepractices.6

Thispricerepresentsthepriceforhigh-capacitygradeanodematerial,whichisthemostwidelyusedgradeofgraphitein

LiBs.ThepriceshownhereisthatprevailinginChina,which,becauseofChina’sdominanceoftheanodematerialmarket(seeFig.9),isthemostrepresentativepriceseriesfortheglobalgraphiteanode

material.EnablingNorthAmericanGraphiteGrowthFig.11.

Realpriceforhigh-capacitygradeanode

materialbychemistry,2021-2028in

China2023

realUS$permetricton$12,000$11,000$10,000$9,000$8,000$7,000$6,00020212022202320242025202620272028Source:

Benchmark

MineralIntelligence,Oxford

EconomicsEnablingNorthAmericanGraphiteGrowth3.RATIONALESFORTRADEACTIONThegeneral

economicbenefitsoffreetradearelongestablished.Notably,free

tradebetweennationsallowsnationstospecializein

sectorswheretheyenjoy

acomparativeadvantageandincreasescompetitionbetweenproducers.Thisresultsinbenefitsfor

consumers(lowerprices

andmore7productvariety

)andhigher

levelsofproductivity.89Thereare,however,severalconditionsunderwhichtradeprotectionmeasures

canbejustifiedtobenefitdomesticbusinessesandconsumers.Theseincludeinfantindustryprotection,protectionagainstunfairtradepractices,andprotectionsdue

tostrategicconcerns.Eachoftheserationalesfortradeprotectionisrelevant

tothe

caseoftheNorthAmericangraphiteindustry:1)

Infantindustries.TheNorthAmericangraphiteindustryisinitsnascencycomparedwiththemoremature

Chinesegraphiteindustry.Duringtheseearlystagesofdevelopment,

domesticgraphiteproducersmayneedtemporarysupportand

protectionfromChinese

competitioninordertogrowintoself-sustainingcompetitivefirms.

A

reliablesupplyofgraphiteis

also

keyforNorthAmerica’sgraphite,EV,anddefenseindustries.2)

Protectionagainstunfairtrade

practices.TheChinesegovernmenthasawell-documentedhistoryofengagingin

unfairtradepracticesthatharmUSindustry,andgraphiteisnoexception.In

2017theUSTRconductedaninvestigationwhichdeterminedthatChinaengagedintrade

practiceswhichburdenedUScommerceacrosshundredsofproducts,includinggraphite.Morerecently,between2021and2023Chinesegraphitesupplyhasexceededglobaldemandandthepriceforhigh-capacitygradeanodematerialfellsharply.Thisexcessproductionand

sharpfallinglobalpricesare

suggestiveofsubsidiesanddumpinginChinesegraphiteandmakeitdifficultforUScompaniesto

enterandoperateinthemarket.3)

Strategicconcerns.GraphiteisakeymineralfortherapidlygrowingEVindustryandlithium-ionbatterieswhichhaveimportantapplicationstomilitaryandadvancedtechnologies.Assuch,tariffsareimportanttoensuretheUS

developsandmaintainsdomesticproductioncapacityofgraphite.4)

Laborandenvironmental

protection.Chinesegraphite

producershavehighergreenhousegasemissions

thanWestern

competitorsowingtotheir

greateruseofcoalpowerandrelativelycheap,inefficient

productionprocesses.FirmsintheChinesebattery

supplychainhavealsobeentiedtostate-sponsored“l(fā)abortransfer”

programs,whichcriticssayamounttoforcedlabor.Theremainderofthis

chapterexplores

eachoftheserationalesfortradeaction

in

moredetail.7

XavierJaravel,andErickSager,‘WhatarethePriceEffectsofTrade?EvidencefromtheU.S.andImplicationsforQuantitativeTradeModels’(August2019).CEPRDiscussionPaperNo.DP13902,AvailableatSSRN:/abstract=34394558

DavidAtkin,Benj