Batteries: China’s New Weapon in US Trade Talks

(Bloomberg) — China’s newly announced raft of restrictions on the export of batteries could have major impacts on US companies, analysts say.

Beijing has previously used rare earths as a tool in the trade war with Washington. But with its commanding position in the battery industry, China has identified another point of leverage in trade talks as the US increasingly needs energy storage to support data centers and stabilize the grid.

The restrictions, which take effect Nov. 8, span a wide swath of the battery supply chain. They include large-scale lithium-ion batteries used for energy storage as well as cathode and anode materials and battery manufacturing machinery, all technologies where China has a robust lead.

As with past restrictions, the new rules require battery companies to receive licenses from the Chinese Ministry of Commerce before exporting their goods. That system allows Beijing to selectively weaponize exports.

“While it doesn't impact as wide a range of industries as other Chinese export controls, the dominance of China in battery supply chains means they can squeeze hard and it can be felt pretty quickly by US companies,” said Matthew Hales, an analyst specializing in trade and supply chains at BloombergNEF.

In the first seven months of 2025, Chinese grid-scale lithium-ion batteries accounted for about 65% of US imports, according to the most recent data available from BNEF. The export curbs would affect these types of batteries, analysts said.

Battery storage is critical for the US as energy demand surges, driven by the artificial intelligence boom. US data centers more than doubled their electricity consumption from 2017 to 2023, according to a report by the Lawrence Berkeley National Laboratory. That figure is expected to as much as triple by 2028, the report notes.

Full story and source: https://finance.yahoo.com/news/china-weapon-us-trade-talks-160949069.html