This ASX tech stock is down 93% from its highs. Could Trump tariffs give it a boost?

The ASX tech stock could enjoy tailwinds from Trump's threatened tariffs.

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ASX tech stock has Novonix Ltd (ASX: NVX) has lost a lot of ground since hitting its highs in 2021.

How much ground?

Well, on 26 November 2021, Novonix shares closed the day trading for $10.68 apiece. In afternoon trade today, shares are changing hands for 75 cents each. This sees shares in the battery materials and technology company down a painful 93% from their highs.

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Some of the selling pressure has come from the depressed market for lithium and other battery-critical materials like graphite, which Novonix produces.

Graphite prices declined around 30% in 2023 and are down 15% in 2024, partly due to strong Chinese supplies.

But with Donald Trump sweeping back into the White House in January following a resounding US election win and his Republican party set to control both the US Senate and House of Representatives, could 2025 be looking brighter for the beleaguered ASX tech stock?

Why this ASX tech stock is eyeing Trump's China agenda

In Trump's first stint as US President, from 2016 to 2020, he actively embraced tariffs to put America first in trade. And China was a favoured target.

When he retakes office in January, Trump has made it clear he will increase trade pressure on China with fresh rounds of tariffs.

And ASX tech stock Novonix could benefit if Trump follows through on his threats to raise tariffs on Chinese critical minerals from the current 25% to 60% or even 100%.

Novonix, which has operations in the US and Canada, could benefit in this case, as its own products are not subject to any potentially boosted tariffs.

According to Novonix CEO Chris Burns (quoted by The Australian Financial Review):

If there's a tariff in place that makes the material cost more from China than we're offering to produce it locally, or at least the same, then no longer are we fighting an uphill battle, asking our customers to pay more for Western material, but we're asking them to pay the same as the imported price.

Customers want to not have 100% of their supply coming from China.

And Burns said he's not overly concerned with Trump's potential to roll back aspects of the Inflation Reduction Act. Under the IRA, the US government has provided the ASX tech stock with some US$200 million in grants and subsidies.

"I think that those types of priorities to reduce our reliance on China for critical materials like this are really bipartisan right now," he said.

"I don't think we're going to see a total pivot away from electrification, which I think was people's concern in initially thinking about what a Trump administration would look like."

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