Summary
The negotiation window has opened.
Recently, Announcement No. 58 of 2026 by the Ministry of Commerce (MOFCOM) and the General Administration of Customs stated: From November 11, 2026, to January 10, 2027, Announcements No. 55, 56, 57, and 58 of 2025 by the MOFCOM and the General Administration of Customs, as well as MOFCOM Announcements No. 61 and 62 of 2025, will continue to be suspended from implementation.
As early as late October last year, China adjusted multiple export controls related to lithium batteries.
Six announcements released on October 9, 2025 (Nos. 55, 56, 57, 58, and MOFCOM Nos. 61, 62), were originally scheduled to take effect on November 8, 2025; however, one day prior to their effective date (November 7), the two departments announced a one-year suspension of their implementation. This suspension has now been extended until January 10, 2027.
While China suspended the implementation of its export controls, the United States took simultaneous action—extending the suspension of its 50% look-through rule until January 10, 2027, as well.
In the long term, this represents a bargaining chip contest in US-China trade. The legal texts of the six announcements remain valid and can be reinstated at any time. This reflects that export controls have become institutionalized and instrumentalized.
For China, the control lists for high-end lithium batteries, high-compaction-density lithium iron phosphate, artificial graphite anodes, and core equipment have become another systematic bargaining chip beyond rare earths.
The continued suspension of these six announcements covers only "incremental" measures. Previous control measures are not included in the suspension and remain in effect to this day, primarily including:
Graphite item export controls starting December 1, 2023: Exports of high-purity, high-strength, high-density artificial graphite materials, natural flake graphite, and their products require licensing. These differ from the regulations targeting "artificial graphite anode materials" in Announcement No. 58 of 2025; the former has been consistently enforced.
Technology export restrictions starting July 2025: The MOFCOM, in conjunction with the Ministry of Science and Technology, adjusted the "Catalogue of Technologies Prohibited or Restricted from Export by China," adding battery cathode material preparation technologies (including lithium iron phosphate and lithium manganese iron phosphate preparation technologies) as restricted technologies—requiring licenses for external technology transfers.
Overall, China already holds a tiered set of regulatory tools across the lithium battery supply chain: basic graphite raw material controls are active, intermediate technology transfer controls are active, and the trump card of cutting-edge high-performance products plus core equipment is held back as a negotiation chip, ready but not yet deployed.
However, even though the six announcements have not formally taken effect, undercurrents in the US-China lithium battery competition are already swirling.
Relevant data shows that from January to July this year, China's total lithium battery exports reached USD 58.004 billion, a year-on-year increase of 40.98%. However, exports to North America alone decreased by 20.2% year-on-year.
Why did exports to the US decline?
First, tariff costs surged within the year. Starting January 1, 2026, the additional tariff rate under Section 301 of the Trade Act for non-automotive lithium batteries (including energy storage batteries) increased from 7.5% to 25%. Combined with the 3.4% base tariff, the comprehensive tariff rate rose to28.4%. In the first half of the year, a temporary 15% surcharge was also applied, significantly eroding the price advantage of Chinese batteries.
Second, "soft isolation" via subsidy rules. While retaining the 30% investment tax credit for energy storage, the US "Inflation Reduction Act" introduced "Foreign Entity of Concern" (FEOC) clauses: projects using Chinese supply chains lose eligibility for subsidies. After detailed rules were implemented in February this year, exclusion rules entered the enforcement phase.
For US buyers, using Chinese cells means forfeiting the 30% tax credit, which has a more targeted expulsion effect than tariffs.
Mirroring the export decline is the acceleration of US lithium battery localization.
On the policy front, the US supports local capacity through a combination of "manufacturing subsidies + power station credits + local content bonuses," while FEOC clauses reverse-pressure buyers to abandon Chinese supply chains.
On the industrial front, at the end of June this year, the Michigan battery factory joint venture between Ford and CATL began cell manufacturing, becoming the first lithium iron phosphate battery plant in the US. With a planned annual capacity of 35GWh, it adopts a model where "Ford fully funds the factory construction, and CATL provides technology licensing."
Additionally, Korean manufacturers such as LG Energy Solution and SK On are ramping up their US production capacities.
But shortcomings are equally obvious: US domestic manufacturing faces high costs and low efficiency, with short-term unsolvable dependencies on upstream materials.
Viewing these two lines together: The US is driving de-Chinization of local manufacturing through "tariffs + domestic subsidies," while China holds the valves for high-end equipment and materials via control lists, keeping them poised but unused.
The extension of this export control suspension period until January 10 next year opens a window for negotiations between both sides, making the time remaining for supply chain adjustments equally precious.