A potential 100% tariff on all Chinese goods marks a drastic escalation in trade tensions, sending shockwaves through global supply chains for clean energy and critical materials.
In a dramatic move that threatens to upend global trade, former President Donald Trump announced a plan to impose a 100% tariff on all imports from China, effective November 1. This policy, declared via social media on October 10, would be applied on top of existing tariffs, potentially pushing the total levy on key products like energy storage batteries to over 140.9% initially, and to a staggering 158.4% by 2026.
The announcement comes just days after China moved to implement export controls on key battery materials and technologies, setting the stage for a tense standoff between the world's two largest economies. This tit-for-tat escalation has put industries reliant on trans-Pacific supply chains on high alert, forcing a frantic reassessment of costs and logistics.
The proposed U.S. tariff is notable for its blanket nature, covering a vast range of goods from consumer electronics to agricultural products. However, its impact on the green energy transition is particularly acute.
For the American energy storage sector, which is crucial for supporting the power grid and the booming demand from AI data centers, the move exacerbates an already challenging situation. The tariff directly targets China's dominance in the battery supply chain, a dependence highlighted by the fact that about 65% of the grid-scale lithium-ion batteries imported by the U.S. in the first seven months of 2025 came from China.
This policy is layered on top of existing measures like the One Big Beautiful Bill Act (OBBB), which uses "Foreign Entities of Concern" (FEOC) clauses to restrict Chinese companies from accessing U.S. subsidies. Together, they create a formidable barrier for Chinese energy products seeking entry into the U.S. market.
The potential for a full-blown trade war immediately resonated in international markets and corporate boardrooms.
The announcement triggered pre-market gains for U.S. rare earth stocks, a sector seen as a potential beneficiary of strained Sino-American relations. This reaction underscores a market bracing for a painful and costly realignment of global supply chains.
Analysts at Wood Mackenzie have warned that in a full "trade war" scenario, the long-term costs for utility-scale energy storage projects in the U.S. could see massive increases, potentially rising by 12% to 50%. Such cost inflation threatens to derail America's clean energy goals and slow the deployment of vital grid infrastructure.
The situation creates a paradox for the U.S.: while aiming for energy independence, its domestic battery manufacturing capacity is projected to meet only 40% of national energy storage demand by 2030. This supply gap means U.S. developers may still need Chinese batteries but at a drastically higher cost, leading to project delays and cancellations.
The U.S. tariff threat is widely perceived as a response to China's recent export controls on critical minerals and advanced battery technologies. China's new regulations, effective November 8, control the export of high-specification lithium batteries, key production machinery, and advanced anode and cathode materials.
By restricting the outflow of these high-end technologies and materials, China is leveraging its dominant position in the battery supply chain—it controls approximately 96% of the global anode material and 85% of the cathode material capacity. This gives Beijing significant counter-leverage in the ongoing trade dispute.
The ultimate impact of the proposed 100% tariff remains uncertain, with some analysts questioning whether it will be fully implemented or face legal challenges. What is clear, however, is that the escalating friction will force a fundamental restructuring of how clean energy technologies are manufactured and traded globally.
Companies are already reacting. Data from the first three quarters of 2025 shows that orders from the U.S. accounted for a mere 1.76% of the total overseas orders announced by Chinese energy storage companies, with markets like Australia and Japan taking the lead. This indicates that Chinese firms are proactively de-risking by pivoting to non-U.S. markets.
The proposed 100% tariff is more than a trade policy; it is a high-stakes gambit in a broader technological and strategic competition. As the November 1 effective date looms, businesses and governments worldwide are recalculating their positions in a global economy that is becoming increasingly fragmented.