2026 Tariffs and the Real Landed Cost of an Imported Battery Pack

What duties apply to a lithium battery pack imported from China?

Lithium-ion cells, modules and complete packs all classify under HTSUS subheading 8507.60.00, "Lithium-ion batteries," with a column 1 general rate of 3.4% (bare parts, by contrast, fall under 8507.90 and their own duty lines). Three layers currently apply to Chinese-origin goods under that subheading:

The Chapter 99 heading carrying the 25% reads, in the tariff schedule's own words: "Effective with respect to entries on or after January 1, 2026, articles the product of China, as provided for in subdivision (g) of U.S. note 31 to this subchapter," dutiable at "the duty provided in the applicable subheading + 25%." Before January 1, non-EV lithium-ion batteries paid 7.5% under the old List 4A heading; the September 2024 modification raised EV batteries to 25% immediately and scheduled the non-EV increase for 2026. USTR declined requests to carve out particular battery types, writing that the President's direction "broadly covers all lithium-ion batteries." There is no exclusion process for them.

The 12.5% layer is newer and less widely understood. It comes from the Section 301 forced-labor investigations of 60 trading partners concluded in June 2026, implemented while the Section 122 surcharge expired. CBP's implementing guidance is blunt: "articles the product of China will be assessed an additional ad valorem rate of duty of 12.5%." Battery products are not on the general exemption lists; 8507.60.00 appears only in the civil-aircraft carve-out, which does not help a ground-based pack. The action does not apply to goods already covered by Section 232 tariffs, and batteries carry none, so for battery imports the 12.5% simply adds to the stack. CBP's guidance states that covered products "shall continue to be subject to antidumping, countervailing, or other duties, taxes, fees, exactions and charges," the operative confirmation that the new duty stacks on the existing Section 301 layer rather than replacing it. One housekeeping note: the new heading was implemented through the Federal Register annex and CBP guidance, and had not yet appeared in the published HTSUS revision as of this writing.

How the stack changed three times in 2026

If you quoted a landed cost in January and shipped in August, your duty assumption is wrong twice over. The year so far:

January 1: the scheduled Section 301 increase took the non-EV battery rate from 7.5% to 25%. With the then-current IEEPA fentanyl tariff (10%, reduced from 20% the previous November) and IEEPA reciprocal tariff (10%) both stacking, a Chinese pack carried 3.4 + 25 + 10 + 10 = 48.4%.

February 20: the Supreme Court decided Learning Resources, Inc. v. Trump. The holding is one sentence: "IEEPA does not authorize the President to impose tariffs." Both IEEPA layers ended by executive order the same day. Four days later a global 10% import surcharge took effect under Section 122 of the Trade Act of 1974, a balance-of-payments authority capped by statute at 15% and at "a period not exceeding 150 days (unless such period is extended by Act of Congress)." The Chinese stack became 3.4 + 25 + 10 = 38.4%. What happens to duties collected under the invalidated orders was not resolved in the Court's opinion, and we do not make any claim here about refunds.

July 24: the 150 days ran out and Congress did not extend. The forced-labor Section 301 duties took effect at the same instant, 12:01 a.m. Eastern on July 24, with an exception for goods already loaded on a vessel before that moment and entered before 12:01 a.m. Eastern on July 28. China landed in the 12.5% tier. The stack became 3.4 + 25 + 12.5 = 40.9%, which is where it stands as of this writing. Unlike Section 122, Section 301 carries no hard rate cap or fixed end date, though its actions lapse after four years unless the domestic industry asks USTR to continue them (19 U.S.C. §2417(c)).

The worked example: what a $50,000 shipment actually pays

Take a hypothetical ocean shipment of industrial 48 V LFP packs from China, customs value $50,000, formal entry at Los Angeles on July 31, 2026. This is PBC's own illustration with round numbers, not a quote, and not any customer's actual shipment.

Two mechanics worth getting right. First, US customs value is generally the price actually paid or payable for the goods, an FOB-type basis, so properly declared international freight and insurance are not dutiable; computing duty on a CIF total overstates the bill. Second, the fees are real but small: the merchandise processing fee is 0.3464% of value within a $33.58 to $651.50 band per formal entry in FY2026, and the harbor maintenance fee is 0.125% on vessel cargo only. Air freight skips the harbor fee entirely. Because the processing fee caps at $651.50, the 41.37% ratio holds at this shipment size; larger entries pay proportionally a little less in fees.

Note also what no longer works: the $800 de minimis exemption is suspended for commercial shipments through every mode except international post, and the statute behind it is repealed effective July 1, 2027. Splitting a shipment into small parcels is not a duty strategy in 2026.

Three smaller levers exist, and none is a loophole. Foreign-trade zones do not shelter the rate: covered Chinese goods must be admitted in privileged foreign status, which fixes their duty character at admission. Section 301 duties are generally eligible for duty drawback, so packs that are later re-exported can recover duties; confirm eligibility with your broker. And the schedule carries a narrow temporary suspension, subheading 9902.16.20, for certain rechargeable lithium batteries with a polymer electrolyte layer and composite cathode; most packs do not meet its description, but it costs nothing to check.

What does the same pack pay from other origins?

The forced-labor action reaches roughly 60 economies, so moving assembly out of China no longer escapes new-generation tariffs entirely; it changes which tier you pay. The named 10% tier includes Malaysia, India, Indonesia, Cambodia, Mexico and Canada, among others. Most other investigated economies, including Vietnam and Thailand, pay 12.5% (the EU and a few developed economies received bespoke net-of-MFN treatment instead). On the $50,000 example: Vietnam owes $7,950 in duties (15.9%), Malaysia $6,700 (13.4%), against China's $20,450. The delta between China and Vietnam is $12,500, precisely the China-only technology-transfer duty.

One caution before treating the lower tiers as an address change: for Section 301 purposes, origin follows CBP's substantial-transformation rules, not the location of final assembly. A pack assembled in Vietnam from Chinese cells can still be a product of China in CBP's analysis, because the cells frequently confer origin, and the difference between 15.9% and 40.9% on a misdeclared entry is a penalty case, not a rounding error. The lower-tier figures here assume the goods genuinely originate in those countries; treat that assumption as a question for your broker, answered in writing, before it goes in a cost model.

The standout is the USMCA route. A pack from Mexico or Canada that qualifies as USMCA-originating enters free of the 3.4% base rate, is expressly exempt from the forced-labor action ("USMCA-compliant goods of Canada or Mexico" are outside its scope, per USTR's notice), and pays no merchandise processing fee. A truck crossing at Laredo also sees no harbor fee. The catch is the word "qualifying": a pack assembled in Mexico from Chinese cells does not automatically originate there under the agreement's tariff-shift rules, and getting that determination wrong invites penalties. Treat origin engineering as a project with your broker and counsel, not a line in a spreadsheet.

For buyers comparing suppliers, the practical consequence is that the duty stack now varies by up to 40.9 points depending on origin for an otherwise identical pack, which is frequently larger than the entire factory-price difference between quotes. A landed-cost comparison that stops at the unit price is not a comparison. Origin strategy also interacts with program timing: recertification and requalification when moving production have their own clocks, covered in our post on how long a custom battery pack program takes, and safety certification carries its own budget, covered in what UN 38.3 testing costs.

What did not happen in 2026

Two threats that dominated last year's coverage are, as of this writing, dead or dormant, and stale articles still citing them will mislead your cost model.

The graphite duties never became orders. Commerce's final determinations on Chinese active anode material (February 2026) set dumping margins of 93.50%, 102.72% for the China-wide entity, and countervailing rates around 66.86%. But in April the International Trade Commission made a negative final determination, finding the domestic industry's establishment "not materially retarded" by the imports. No order issues after a negative ITC vote; suspension of liquidation lifts and deposits are refunded. And even the determined scope expressly excluded "active anode material incorporated into imports of lithium-ion battery products (such as cells, modules, and packs)." So finished packs were never covered, and the headline graphite rates now apply to nothing.

Section 232 has not touched batteries yet. The critical-minerals investigation completed in late 2025 found imports threaten national security, but the January 2026 proclamation ordered negotiations rather than tariffs, with a 180-day progress checkpoint that fell in mid-July. Nothing battery-specific has issued as of this writing. This is the number-one watch item for the rest of 2026: a Section 232 action on processed critical minerals or their derivative products could reshape the stack again, and Section 232 duties sit outside the forced-labor action's scope rather than adding to it.

What to do with this

Three habits keep a 2026 landed-cost model honest. Date-stamp every duty figure, because a rate without an entry date is meaningless this year. Model the stack by origin before comparing supplier quotes, since origin now moves cost more than most price negotiations. And put a review trigger on your model for any Section 232 critical-minerals action, the next scheduled place a new layer could appear. The courts are a second trigger: the Court of International Trade ruled against the Section 122 surcharge in May 2026 while it was in force, per trade-bar reporting, and early challenges to the forced-labor action are reported as well. A ruling can move these numbers as fast as a proclamation did in February. PBC ships programs from multiple origins and prices landed cost by lane; the duty math above is the same math we run for our own pack programs and catalog products.

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