South Korea's battery and mineral investments in Canada are expected to take a hit from US president-elect Donald Trump's proposed 25pc tariff on all Canadian imports, South Korea's trade and industry ministry Motie warned today.
Trump's threat serves as a precedent for future global tariff measures from the US, according to Motie, citing its trade minister Cheong In-kyo, who held a roundtable on the tariff threat today. South Korean firms have been investing in Canada as it serves as a base to enter the North American electric vehicle (EV) and battery market, but companies that did so are expected to be "significantly affected" by the potential tariff, according to Motie.
Any development in the tariff threat is being closely monitored to inform the South Korean government of potential future trade risks, according to Cheong, who added that South Korea will work closely with the Canadian government to "minimise" the "uncertainties" posed.
Top South Korean battery maker LG Energy Solution (LGES) and South Korean battery materials producer Posco Future M — a subsidiary of conglomerate Posco — are some of the companies that have bet on Canada. LGES' joint venture with global automaker Stellantis, which is the first large-scale EV battery manufacturing facility in the country with a production capacity of 49.5GWh, began its battery module production in October, with cell manufacturing to commence in 2025.
LGES in 2022 also signed agreements with Canadian firms Electra, Avalon and Snow Lake for lithium hydroxide and cobalt supply. Electra's agreement was later expanded and is supposed to supply LGES 19,000 t/yr of "battery-grade cobalt" for five years starting from 2025, according to Electra. Electra secured a $20mn prepayment facility in September to help plug a $60mn gap in capital that it needs to finish its $250mn refinery in Ontario.
But Posco Future M earlier this year, citing "local conditions", delayed the completion of its 30,000 t/yr high-nickel cathode active material plant in Quebec, which is a joint venture with US automaker General Motors.
