US Tariffs on Energy & Batteries

What This Covers

The energy and batteries surcharge covers solar panels, lithium-ion batteries, electric vehicle batteries, energy storage systems, and related clean energy components classified under HTS chapter 85. This sector faces the most aggressive Section 301 tariff actions of any category: Chinese solar panels are subject to a 50% surcharge and EV batteries face a 25% surcharge, reflecting US policy to build domestic clean energy manufacturing. These Section 301 tariffs were completely unaffected by the Supreme Court's February 20, 2026 ruling. The 10% Section 122 tariff (effective February 24, 2026, expiring ~July 24, 2026) now applies as the uniform additional layer across all source countries.

Most Affected Countries

China faces the most extreme tariff burden of any sector, with 50% Section 301 on solar panels and 25% on EV batteries stacking on top of the 10% Section 122 tariff, creating combined rates of 60%+ on solar and 35%+ on batteries. South Korea and Japan, as major battery manufacturers, now face only the 10% Section 122 tariff — a reduction from their former IEEPA reciprocal rates — strengthening their competitive position against Chinese battery suppliers. Malaysia, Taiwan, and Thailand, which serve as important assembly points for solar components, benefit from the uniform 10% rate but continue to face scrutiny for potential circumvention of Chinese tariff orders.

How Surcharges Stack

Chinese solar panels face the 50% Section 301 tariff plus the 10% Section 122 tariff, for combined rates exceeding 60% that have effectively eliminated direct Chinese solar panel imports. EV batteries from China face the 25% Section 301 surcharge plus the 10% Section 122 tariff, totaling approximately 35%. South Korean batteries now face only the 10% Section 122 rate on top of any base duty — a marked improvement from their former IEEPA reciprocal rate — giving Korean manufacturers like LG and Samsung SDI an even wider competitive advantage over Chinese alternatives. Solar panels assembled in Southeast Asian countries face the uniform 10% Section 122 rate, though anti-circumvention investigations remain a risk factor. The Section 122 tariff expires around July 24, 2026, which could further widen the price gap between Chinese and non-Chinese clean energy products.

Sourcing Strategies

South Korea and Japan are now the clear winners for battery sourcing, with the 10% Section 122 rate offering a dramatically lower tariff burden than China's 35% combined rate. Investing in domestic US solar panel and battery manufacturing continues to be supported by Inflation Reduction Act incentives that offset higher production costs. For solar components, the uniform 10% rate across India, Malaysia, and other emerging solar manufacturing countries removes tariff-driven preferences and allows procurement teams to focus on quality, reliability, and anti-circumvention compliance. With Section 122 expiring around July 2026, non-China battery and solar imports could become even cheaper, making this a pivotal period for companies to establish supply relationships with Korean, Japanese, and Southeast Asian clean energy manufacturers.