US Tariff Surge 2025: Impact on EV Battery Supply Chains and Southeast Asian Economy

Waking up to market news today, many investors might notice automotive and tech stocks painted red across the board. The culprit? The US just unleashed a new wave of tariffs reaching up to 50% on goods from the European Union (jumping from 20% to 50% starting May 2025), Mexico, and Brazil. For Chinese battery components specifically, some materials like graphite now face cumulative tariff rates of up to 160%, while other battery components hit tariffs as high as 80%. These aren't just "hefty" numbers—they're reshaking the entire global supply chain.

Why EV Batteries Are Taking the Biggest Hit

Here's something you might not know: China controls 70-80% of the global lithium-ion battery market. When the US slaps high tariffs on Chinese battery components, it means an electric vehicle in America will cost an additional $7,000-8,200 (equivalent to 170-200 million VND)—enough to make middle-class American families "think twice" about going electric.

A manufacturing company in Binh Duong shared with me: "We're pulling all-nighters searching for new component suppliers. EU suppliers are now jacking up prices because they know they have a chance to replace China."

Southeast Asia: Golden Opportunity or "Tariff Trap"?

The good news is Vietnam just secured a preferential tariff agreement with the US at 20% on most export goods (effective July 2025)—significantly lower than the 49% imposed on other regional countries. However, goods suspected of being "Chinese origin" will still face 40% tariffs. This opens major opportunities for domestic businesses but also demands transparency in product sourcing.

According to JPMorgan's analysis, US GDP could drop 0.3-0.9 percentage points in 2025 due to these tariff policies (worst-case scenario). This means purchasing power in the US market—our largest customer—will also decline.