China's PV film exports to the US face tariffs as high as 29.2%. What are the rates for Vietnam and Malaysia? [SMM Analysis]

In August 2024, China's PV film exports were mainly to: Poland (21.78%), Indonesia (19.29%), South Korea (11.56%), Turkey (5.66%), and Russia (3.87%). To promote the development of local PV industries, countries like Europe and the US have raised tariffs and increased trade barriers. China's PV products face a 29.2% export tariff to the US, while the rate for Malaysia and Vietnam is 4.2%. Southeast Asia is expected to become a major destination for Chinese PV companies to transfer capacity.

Currently, China's PV film companies have overseas capacity mainly in Vietnam and Malaysia.

The US imposes a high additional tax on PV film imported from China, 25% higher than that from Vietnam and Malaysia. According to the US Trade Representative (USTR) Federal Register, from August 1, the tariff on solar cells (including those assembled into modules) will increase from 25% to 50%. However, on August 12, President Biden announced a significant increase in the quota for duty-free imported solar cells, from 5GW to 12.5GW annually, to support domestic module manufacturers reliant on imported cells. Despite this, the US PV module market still faces a supply shortage, making it a key profit market for Chinese cell and module companies. Due to increased tariffs, Southeast Asia is expected to become a major destination for Chinese PV companies to transfer capacity.

Russia implements a zero-tariff policy on films imported from Vietnam. Domestic companies are actively leveraging this advantage, with film companies like Hangzhou First, HiUV, Betterial, and Crown Advanced Material establishing production bases in Vietnam. Currently, the shipment volumes of Vietnamese films produced by Crown and First are stable.

Turkey and India are the top two markets for China's solar cell exports. The Turkish Directorate General of Imports (DGI) announced that from September 27, a tariff of $25 per m² will be imposed on PV modules imported from Vietnam, Malaysia, Thailand, Croatia, and Jordan. However, some companies have received tariff exemptions, including Jinko Solar's subsidiary in Malaysia, JA Solar's subsidiary in Vietnam, Trinasolar's subsidiary in Thailand, and Vina Solar, a module manufacturer in Vietnam acquired by LONGi. Currently, Turkey imposes a 7% tariff on films from China, while films from Malaysia and Vietnam are subject to zero tariffs.

According to a notice from India's Directorate General of Trade Remedies (DGTR) on February 21, it is recommended to impose an anti-dumping duty of $0.538 per kg on EVA film for PV modules imported from China, Malaysia, Saudi Arabia, Vietnam, and Thailand, effective for five years from the official government decision notification.

In fact, continuously increasing trade restrictions on China aim to promote the localization of PV manufacturing. China's PV industry leads globally, especially in cells and modules, with China's module production accounting for 87.66% of global production in September. This results in a wide supply of Chinese PV products and high global dependency. However, with the accelerated restructuring of the international trade landscape, manufacturing is showing a trend of localization and nearshoring. Countries like Europe, the US, India, and Turkey are continuously promoting the localization of the PV manufacturing industry.

This trend poses severe challenges for Chinese PV film companies, forcing them to accelerate the adjustment of supply chain layouts and gradually transfer some capacity to Southeast Asia and other regions with lower tariffs on Chinese products. Meanwhile, facing an increasingly complex international trade environment, Chinese PV film companies need to focus more on technological innovation and increase the added value of their products. Strengthening strategic cooperation with overseas partners and actively and rationally deploying Chinese companies' overseas capacity is expected to continue to play a leading role and achieve new growth in the global PV industry's localization wave.