Last week, Donald Trump’s administration announced a staggering 93.5% tariff on Chinese graphite—a material essential to battery production. China not only dominates graphite mining but controls 96% of the global supply of processed anode-grade graphite, a necessary component of lithium-ion batteries. The move will send shockwaves through the already fragile battery supply chain and all but guarantee higher costs for U.S. manufacturers. It’s only the latest in a string of irrational policies that make it harder, not easier, to bring manufacturing back home.
Earlier this month, Congressional Republicans passed the president’s massively unpopular budget bill, effectively repealing Joe Biden’s signature clean energy legislation, the Inflation Reduction Act (IRA).
While most attention on the bill’s energy components has focused on the damage to the wind and solar industries, the GOP’s mega bill will also upend the booming battery business, gutting one of the economy’s fastest-growing and strategically vital industries. While the Biden administration made substantial progress in building a domestic battery supply chain, Trump is kneecapping battery manufacturing in the U.S. by crushing demand and hiking up input costs.
The contradictions in Trump’s “America First” strategy are hard to miss: the White House pushes policies to streamline critical minerals production while dismantling the very industries that need such minerals; it taxes essential imports without supporting domestic replacements; and it proclaims its mission to bring back American manufacturing jobs while enacting policies that shut down factories.
America’s clean energy transition cannot be stopped but can be slowed. Trump and the Republicans have decided to do just that—even if it means fewer jobs, higher prices, and more energy dependence.
The Industrial Policy That Was
The industrial policies passed under Biden ushered in a resurgence in American manufacturing by employing carrots (tax credits) and sticks (tariffs and domestic content requirements). The Inflation Reduction Act, the Bipartisan Infrastructure Law (BIL), and the CHIPS Act jump-started a clean energy boom, using targeted public investment to catalyze trillions in private capital.
The Biden administration strategically designed an industrial policy for batteries. Tax credits ‘derisked’ investment returns and improved the cost-competitiveness of battery storage, while Foreign Entity of Concern (FEOC) provisions penalized companies that continued relying on imported battery components. Those restrictions were carefully thought out and set to tighten gradually, giving American firms time to build out a domestic supply chain.
And it worked. According to the Clean Investment Monitor, Biden’s green industrial strategy tripled quarterly investment in clean manufacturing from 2022 to 2025. Since the IRA passed, over 380 clean-tech factories have been announced, with 161 already operational. And of the $115 billion in manufacturing investment the IRA attracted, batteries led the way, accounting for 69 percent. In a short time, the Biden incentives made U.S. battery production cost-competitive with China—which dominates over two-thirds of the global battery supply chain—and put the nation on track to achieve a 100-percent Made-in-America battery supply chain by 2030.
Well, it did—until the Republican Party returned to power and proved that their “America First” rhetoric is hollow.
Killing America’s Manufacturing First
Trump’s signature legislation, the One Big Beautiful Bill Act, signed this month, guts the tax credits that help American manufacturing catch up to China, while imposing tariffs in a blunderbuss manner. The only outcome of this so-called economic “strategy” will be higher inflation and persistent shortages of overseas goods and commodities. And the effects of Trump’s tariffs are only beginning to reach consumers.
Since Trump’s inauguration, over $21 billion of investment in clean energy manufacturing has been canceled, bankrupted, delayed, or scaled back, taking over 21,000 jobs. More EV manufacturing facilities, including battery plants, were cancelled in the first three months of Trump’s second term than in all 2023 and 2024 combined.
The repeal of the EV tax credit and Biden-era tailpipe emissions regulations deals a blow to EV adoption, but it will cripple America’s battery manufacturing. A report by Princeton’s ZERO Lab for energy research estimates that not only will these repeals result in the cancellation of an eyepopping 100 percent of planned battery facilities, but they also threaten to shut down up to three-fourths of battery manufacturing plants. Withdraw market incentives, and the market dries up. EV sales are projected to fall 30 percent by 2027 and 40 percent by 2030. That translates to 8.3 million fewer EVs, and 8.3 million fewer batteries needed to power them.
The IRA didn’t just spur investment in battery manufacturing; it helped create over 100,000 decent blue-collar jobs in battery production in just three years. However, within the first five months of Trump’s presidency, more than 6,000 of those jobs were wiped out.
With the passage of the One Big Beautiful Bill Act, the nonpartisan energy policy think tank, Energy Innovation, projects that over 31,000 battery jobs will evaporate by 2030. But the more profound tragedy is the millions of American jobs in manufacturing, supporting industries, and local economies that will now never materialize.
These aren’t workforce reductions for a dying industry. They are layoffs in the sectors of tomorrow—cuts to a technology that makes a more resilient, affordable energy system for America possible.
The Reliability Boogieman
Trump and the GOP are doubling down on fossil fuels, even as the economics of renewables—even paired with battery storage—make that strategy irrational. Batteries absorb electricity during the day while prices are low and discharge it during peak demand hours, improving grid reliability and cutting energy costs for consumers.
Look at Texas, the country’s least regulated electricity market, where battery storage is booming to take advantage of dirt-cheap solar power. The growth of solar and batteries there has significantly reduced the risk of grid emergencies for which the Lone Star State had become infamous. Solar provides power during the hottest hours of the day, while batteries store the excess and release it as the sun sets. In California, where battery capacity has exploded 30-fold since 2018, record discharges of battery power during last year’s extreme heat meant that the state didn’t need to issue a single energy conservation alert.
Ironically, battery storage provides precisely the type of dispatchable energy that Trump administration officials claim they want. A recent report by the North American Electric Reliability Corporation, a not-for-profit regulatory authority that sets and enforces grid reliability standards, found that battery expansion improved overall grid reliability even as the rapid uptake of data centers increases strain on the system.
Energy Secretary Chris Wright has pulled support for long-duration battery storage projects and cut funding for scientific research into advanced battery technologies. As one senior DOE official told The Guardian, “If you stop any research for next generation solar or battery technology, or wind or geothermal or other pieces, what you’re effectively doing is compromising a huge range of technology that has the potential to reduce costs.”
For all its talk about American energy dominance and lower prices, raising energy costs is exactly what the Trump administration’s policies are accomplishing. Since January, thanks to Trump’s tariffs, short-term battery storage costs have risen 56 percent to 69 percent. Unsurprisingly, deployment of battery storage on the grid is expected to fall 30 percent over the next decade. The Trump administration likes to harp constantly about supporting “affordable, reliable and secure energy”—they forget to add “as long as it suits my party’s ideological priors.”
Making America Competitive, by Removing the Competition
This comes as Trump and the GOP rail against U.S. dependence on Chinese batteries and the need to reshore American manufacturing, after passing a bill to decimate the domestic battery industry.
While the final version of the GOP megabill technically retains the advanced manufacturing tax credit for battery producers, new “Foreign Entity of Concern” (FEOC) rules—read: China—impose unworkable domestic content requirements that make the credits inaccessible. Both complex and vague, the FEOC provisions will require regulatory guidance from the Treasury Department—a process that took two years under Biden. Until then, companies won’t invest without knowing whether they’ll qualify for the credits.
Meanwhile, the GOP is aggressively deregulating extractive industries. While boosting critical mineral production can support the buildout of a domestic supply chain, it makes little sense to simultaneously undercut the high-value-add industries like battery manufacturing that create the very demand for those minerals.
Yet Trump is doing just that. He has leaned on the Cold War-era Defense Production Act to boost investment in critical mineral production. The Department of the Interior is streamlining permitting processes for lithium mines. Hell, Trump strong-armed Ukraine into signing over its mineral resources in exchange for protection from Russia. However, these resources are critical because they serve the transition to clean energy. Why produce more lithium if not to make more batteries?
To wit: Trump just announced a 50-percent tariff on copper imports from Brazil, citing the critical need for the conductive metal in everything from semiconductors to ships to batteries. Ignoring that Trump is wielding tariffs against Brazil to undermine their democratic government and force a pardon of their MAGA-like former president, the U.S. imports nearly half of its copper. There’s no alternative path to achieve copper self-sufficiency in the near or long term. Whereas a new battery plant can come online within two years, a mine or refinery typically takes 5 to 7 years to deploy—investors can hardly expect U.S. trade policy to remain stable for 30 days, let alone during the remaining three-and-a-half years of Trump’s term in office.
Ultimately, the Trump administration and congressional Republicans have been pursuing policies to expand domestic mining, refining, and processing of critical minerals—arguably worthy goals, but not if you’re simultaneously destroying the manufacturing of products derived from such resources. They are ceding the lead in clean tech to China so the U.S. can become a raw materials exporter like so many Third-World nations trapped in the cycle of extraction without development.
I Guess We’re Screwed?
Justin Wolfers, the University of Michigan economist, accurately sums up Trump’s “plan” to restore U.S. manufacturing: “raise the price of inputs like steel, aluminum, & copper; create shortages of rare earths; invite retaliatory tariffs; cut R&D; raise borrowing costs by blowing out the budget; and to cover it all in a thick cloud of uncertainty.”
Trump’s tariffs raise prices without incentivizing investment in domestic manufacturing. The 50-percent tariffs on imported steel have doubled the price of domestic steel, yet many companies still import because even inflated foreign steel is cheaper.
The still-young American battery industry hasn’t had enough time to relocate its supply chain. China still dominates the global market for key battery components—controlling over 90 percent of anode materials, for instance—which U.S. companies must depend on until suitable (and competitive) domestic alternatives emerge. Raising input costs by 30 to 150 percent doesn’t guide investment—it paralyzes it.
Trump returned to office partly under the dubious promise to ‘Make America Great Again’ by reviving domestic manufacturing and restoring high-wage blue-collar jobs. Now he and the GOP aren’t just breaking that promise, they’re spitting in the faces of the Americans who believed them.
