SEOUL – In a bold and controversial move, the second Trump administration has slammed a jaw-dropping 145% tariff on Chinese-made batteries, especially those used in energy storage systems (ESS). While this has rattled China’s dominance in the U.S. market, it has sparked a wave of opportunity for South Korean battery makers who’ve long competed for a seat at the table.
The tariff hike, announced on April 10, raises previous levies from 34% to a steep 125%, and that’s on top of an existing 20% tariff. Framed as part of a broader strategy to curb fentanyl trafficking from China, the move is also a sharp economic play — effectively making Chinese batteries 2.45 times more expensive overnight.
And the numbers don’t lie.
According to the Atlantic Council, China shipped $15.3 billion worth of lithium-ion batteries to the U.S. last year. If demand holds steady, this could balloon to over $37 billion in cost after the new tariffs — suddenly making Chinese batteries far less attractive.
That’s music to the ears of South Korean giants like LG Energy Solution, Samsung SDI, and SK On, who’ve struggled to compete with China’s lower prices. For years, Chinese lithium iron phosphate (LFP) batteries, known for their affordability and scalability, were the go-to choice for American data centers and energy firms. But with price no longer on China’s side, the playing field just got a lot more level.
One insider put it simply:
“Chinese LFP batteries were dominating purely because of their price. Now, that price edge is gone.”
But don’t expect China to back down easily. Sources suggest Beijing is preparing countermeasures, and while Trump has left room for negotiation, few believe he’ll reverse course completely.
Back on Korean soil, manufacturers are moving fast.
LG Energy Solution is retooling production lines in Michigan to mass-produce LFP batteries by the end of this year — a full year ahead of schedule. This shift could give them a critical edge, as they aim to meet growing U.S. demand without the baggage of sky-high tariffs.
Just last month, LG inked a deal with Delta Electronics to supply enough ESS batteries to power over 400,000 U.S. homes by 2030.
Samsung SDI isn’t staying quiet either. Their dual-track strategy focuses on both high-end nickel-based cells and newer LFP products. A recent $301 million deal with NextEra Energy is proof of their growing presence. Plus, they’re eyeing a North American plant to escape tariffs altogether.
SK On, meanwhile, is placing big bets on its Georgia facility and joint ventures with Hyundai and Ford, aiming to launch LFP pouch cells by late 2025.
All of this momentum is backed by staggering growth predictions. The U.S. ESS market, valued at $10.67 billion in 2023, is expected to explode to a mind-blowing $1.49 trillion by 2034, growing at 29.1% annually, says Global Market Insights.
In short, while China may be feeling the heat, South Korea is stepping into the spotlight — ready to power the future, one battery at a time.
