The U.S. government has finalized severe tariffs on imports of solar panels from four Southeast Asian countries, in connection with a complaint filed last year by major U.S.-based solar manufacturers.
The U.S. Commerce Department determined that solar cells from Cambodia, Malaysia, Thailand, and Vietnam were being “dumped” into the U.S. market at artificially low prices, and benefiting from unfair Chinese government subsidies, the Department’s International Trade Administration (ITA) said in a statement late on Monday.
The tariffs varied widely depending on the company and country, ranging from just over 41 percent on Jinko Solar products from Malaysia to over 375 percent on products manufactured by Trina Solar in Thailand. Solar panels and components from Cambodia were slapped with duties of more than 3,500 percent—a rate so high that it amounts to an import ban—because their producers chose not to cooperate with the American investigation.
The tariff rates represent the Commerce Department’s “final affirmative determinations” in two trade complaints filed last year by the American Alliance for Solar Manufacturing Trade Committee, which represents several major solar equipment producers, including South Korea’s Hanwha Qcells USA Inc. and the U.S. firm First Solar Inc. The first complaint claimed that solar imports from Cambodia, Malaysia, Thailand, and Vietnam were unfairly benefiting from Chinese government aid. The second accused these companies of flooding the U.S. market with unfairly priced goods.
In preliminary rulings in October and December of last year, the Commerce Department ruled in favor of the Alliance, arguing that Chinese firms based in the four nations were circumventing its existing antidumping and countervailing duty orders on solar cells from China. It then announced preliminary tariffs on imports from these countries, although the rates announced this week were significantly higher.
“These are very strong results,” Tim Brightbill, an attorney for the Alliance, told reporters, according to Reuters. “We are confident that they will address the unfair trade practices of the Chinese-owned companies in these four countries, which have been injuring the U.S. solar manufacturing industry for far too long.”
The tariffs will not come into effect until the International Trade Commission votes on whether the industry was materially harmed by the dumped and subsidized imports. The vote must take place by June 2.
In 2023, these four countries exported almost $12 billion worth of solar panels and related components to the U.S., making up around 80 percent of total U.S. imports of these goods. The imposition of such severe tariffs would therefore amount to a significant reshaping of the global supply chains for these products.
Indeed, changes in the supply chains are already evident, in anticipation of a cut-off of imports from Cambodia, Thailand, Vietnam, and Malaysia. As Reuters reported, “Imports from the four targeted countries this year are a fraction of what they were a year ago, while shipments of panels from nations like Laos and Indonesia are on the rise.”
In a post on X, Trinh Nguyen, a senior economist for emerging Asia at the financial services firm Natixis, described the ruling as “a win” for U.S. producers, and also those, such as Hanwha Qcells, which have invested in solar panel manufacturing facilities in the United States. “It rewards onshoring & closes out loopholes of cheap Chinese solar that were being arbitraged via Southeast Asian countries,” she wrote.
These solar panel tariffs have enjoyed bipartisan support, and are not directly related to the severe “reciprocal tariffs” announced by President Donald Trump on April 2. But the imposition of the high anti-dumping duties could well play into the trade negotiations that are taking place, or are likely to take place, with these four Southeast Asian nations. This is particularly the case for Vietnam, which was hit with a 46 percent tariff by Trump, as “punishment” for its lopsided trade surplus with the U.S.
This has grown significantly since the first Trump administration imposed tariffs on Chinese imports to the U.S., rising from $38.3 billion in 2017 to $123.5 billion last year. This has naturally raised concerns in Washington that much of this surplus has been made up of Chinese goods that are either fraudulently transshipped via Vietnam, or goods made in Chinese factories set up in the country to avoid U.S. tariffs on Chinese imports.
As Trinh Nguyen noted, the solar duties, which will eliminate much (if not all) of the exports of solar panels and related technology from Vietnam to the U.S., demonstrate the risks to Vietnam of being perceived as a mere transshipment point for Chinese goods. While the extent of this transshipment has arguably been exaggerated, any attempt by Vietnam to argue down the 46 percent reciprocal tariff will likely involve commitments to prevent the rerouting of goods from China. The Vietnamese government recently announced its intention to do so, suggesting an awareness of the problem that this poses for its lucrative trade relationship with the United States.
Meanwhile, the effective cut-off of cheap Chinese solar imports will force Americans to buy more expensive solar panels from local manufacturers. Some critics of the tariffs, including the Solar Energy Industries Association trade group, also argue that they will harm U.S. solar producers by raising prices on imported cells and other components that are assembled into panels by U.S.-based factories. However, this is a cost that Washington seems ready to bear in order to protect and develop industries that it has identified as a national security priority.
