Hefty US Tariffs on Solar Products from Southeast Asia Could Reshape Global Industry Chain

Against the backdrop of the evolving global PV industry landscape, the US's newly introduced tariff policy on solar products from Southeast Asia is triggering a major transformation in the industry chain.

Hefty Tariffs Officially Implemented

On May 20 local time, the US International Trade Commission (ITC) unanimously approved a resolution to impose punitive tariffs on solar products from Cambodia, Malaysia, Thailand, and Vietnam. In fact, as early as last month, the US Department of Commerce had already determined the specific tariff rates based on their so-called "investigation findings." Now that the resolution has been formally passed, it undoubtedly marks the finalization of the policy, posing severe challenges to the PV industry in Southeast Asia and across Asia.

According to local media estimates, if all procedures are completed, the new tariff policy could take effect as early as mid-June. Cambodia faces the harshest comprehensive tariff rate of 3,529.33% (including a 125.37% anti-dumping duty and a 3,403.96% countervailing duty), while Vietnam, Thailand, and Malaysia face rates of 813.92%, 1,002.45%, and 250.04%, respectively, all composed of anti-dumping and countervailing duties.

This policy is not sudden but rather a continuation and escalation of the US's series of trade restrictions on China's PV industry since 2012, including the "201 tariffs" in 2018 and the Inflation Reduction Act (IRA) in 2022. Notably, this ruling innovatively introduces the concept of "cross-border subsidies," bringing Chinese government support for manufacturing enterprises invested in Southeast Asia under the scope of sanctions. In reality, this is likely the primary motivation behind the US's imposition of such severe tariffs on the four Southeast Asian countries, marking a further deepening and expansion of US new energy trade protection policies. From an industrial perspective, these hefty tariffs not only directly target the current supply chain but may also set a precedent for future US sanctions on PV products from other regions.

Global Supply Chain Faces Deep Restructuring

According to data from the US Energy Information Administration (EIA)'s 2023 annual report, the US imported $12.9 billion worth of solar equipment from these four Southeast Asian countries, accounting for nearly 80% of its total imports of such products. This high market dependency means the tariff policy will have a significant impact on the US solar market.

In this context, related companies face difficult choices: continuing exports could mean costs doubling, completely eroding price competitiveness, while relocating capacity would require restructuring the supply chain, incurring substantial time and financial costs. Many Chinese companies with factories in Southeast Asia will bear the brunt, potentially forced to adopt production cuts as a last resort. Such short-term supply chain disruptions will not only affect corporate operations but could also lead to tight supply in the global PV market. This reconfiguration of the supply chain may also trigger a chain reaction: On the one hand, the proportion of US domestic manufacturing is expected to increase significantly, but there is still a huge gap between the current module capacity of 12.5 GW and the annual demand of 32 GW, which is likely to prompt many companies to increase their investments in the US. On the other hand, Europe is likely to follow in the US's footsteps and introduce similar trade protection measures, while emerging markets such as India, Mexico, and the Middle East have become new directions for Chinese PV companies to expand into.

Opposition from US Practitioners

After the voting results were announced, there were two distinct opinions among relevant US practitioners. Tim Brightbill, the chief counsel of the Coalition for American Solar Manufacturing Trade Committee, made a strong statement, accusing Chinese companies of dumping subsidized, low-cost solar products into the US market through factories in Southeast Asia, claiming that this "violates trade laws" and "undermines US industrial strategy." He emphasized that the new tariffs would ensure "fair competition opportunities" for US companies.

This stance was supported by some domestic manufacturers, particularly those benefiting from the tax credits under the Inflation Reduction Act (IRA) — since the Act came into effect in 2022, more than 100 solar factories in the US have announced plans for new construction or expansion. However, due to the affordable and high-quality Chinese modules, the market performance of these factories in the US has not been optimistic.

Abigail Ross Hopper, the president of the Solar Energy Industries Association (SEIA), warned that tariffs would drive up the prices of solar products and harm the development of clean energy in the US. She pointed out that the vast majority of solar panels in the US rely on imports from Asia, and the new tariffs may increase project construction costs and hinder the supply chain support needed for the expansion of domestic manufacturing. However, the difference in their opinions can be seen from their specific job titles. Brightbill serves the manufacturing and trade industries, mostly dealing with the production and sales ends. From their perspective, foreign products are naturally better sold at higher prices. Hopper, on the other hand, focuses on the overall development of clean energy in the US. In his view, the higher the proportion of clean energy in the US, the better, and it does not matter whether these modules come from the US, Vietnam, or China. This divergence also highlights the deep-seated conflict between "protecting domestic industries" and "maintaining the pace of energy transition" in the US at present.

Conclusion

The impact of the latest US tariff policy on the PV industries in Southeast Asia and China will go far beyond the scope of trade, affecting the industrial structure of new energy in their respective countries and even the development of clean energy.

Please note that this news is sourced from https://solar.ofweek.com/2025-05/ART-260001-8420-30663389.html and translated by SMM.