The US government's recent tariffs on critical minerals will have a significant impact on Canada's role as a major supplier in the sector [937c41d4]. China, in response to the tariffs, plans to flood the market with critical minerals to undercut its competitors. Canadian Deputy Prime Minister Chrystia Freeland has criticized China's overproduction in this area [937c41d4].
The Biden administration has introduced a 25% tariff on natural graphite starting in 2026 and a 27% tariff on synthetic graphite from China starting on June 14th [937c41d4]. These tariffs aim to reduce reliance on China and strengthen domestic mining activities in the United States. However, they will also impact Canada's critical mineral industry, as it is a major supplier of graphite to the US market.
American automakers are urging the Biden administration to pause tariffs on Chinese graphite, fearing that it will increase prices for electric vehicles [5459249b]. The tariffs on Chinese graphite are a concern because graphite is a crucial component in the production of electric vehicle batteries. The automakers argue that the tariffs will raise costs and hinder the development and affordability of electric vehicles.
On the other hand, a US mining company is asking for trade protections to create a robust domestic supply of graphite [5459249b]. They believe that building a domestic industry is essential to reduce reliance on China and ensure a stable supply chain for critical minerals. The company highlights the importance of small components like graphite in the production of electric vehicles and batteries and emphasizes the need for upfront investment and limited options for diversification away from Chinese graphite.
In response to the changing policy landscape, Canadian industry leaders are taking steps to capitalize on the situation. The cities of Kingston and Greater Sudbury have announced the formation of the Kingston-Greater Sudbury Critical Minerals Alliance [937c41d4]. This alliance aims to strengthen Canada's position in the critical minerals sector and enhance collaboration between industry, government, and academia.
Furthermore, the US government has partnered with Ottawa to fund a graphite project in Quebec. The project, led by Fortune Minerals Ltd., will receive a $32.5 million co-investment to support the development of the graphite mining industry in Canada [937c41d4].
The conflict over the tariffs on Chinese graphite reflects the importance of small components like graphite in the production of electric vehicles and batteries. American automakers are concerned that the tariffs will increase prices for electric vehicles and hinder their development and affordability [594eca9b]. On the other hand, a US mining company argues for trade protections to create a robust domestic supply of graphite and reduce reliance on China [594eca9b]. The Canadian government and industry are actively working to navigate the changing landscape and seize opportunities for growth and collaboration [937c41d4].
It remains to be seen how the US tariffs and China's response will shape the global critical minerals market and Canada's role within it. However, the Canadian government and industry are actively working to navigate the changing landscape and seize opportunities for growth and collaboration [937c41d4].