The United States Department of Commerce announced on Monday (April 21) that it will impose high tariffs on imported solar cells and modules from Southeast Asia, with rates as high as 3,521%. This measure aims to prevent Chinese companies from using Southeast Asia as a “transit point” to evade tariffs on Chinese-made solar products, marking an important action by the US government to combat unfair trade practices.
According to the announcement by the US Department of Commerce, although these products are manufactured in countries such as Cambodia, Malaysia, Thailand, and Vietnam, most of them are actually produced by factories owned and operated by Chinese companies. This practice of using “minimal processing” to change the export destination in order to avoid taxes is known as “transshipment” in the industry.
The case was initially initiated by Korean company Hanwha Q Cells, and US companies such as First Solar in April 2024. These companies filed a complaint with the US government, alleging that Chinese firms, after setting up factories in Southeast Asia, are selling products in the US market below cost and receiving subsidies from China and local governments, causing significant harm to the US solar manufacturing industry.
US manufacturers point out that despite subsidies provided through the Inflation Reduction Act, many domestic solar module assembly plants in the US struggle to compete with low-priced products from Southeast Asia, leading to low capacity utilization rates and reflecting actual harm to the industry.
After a year-long investigation, the Department of Commerce decided to impose anti-dumping and countervailing duties on the products involved. This measure is still pending the International Trade Commission’s (ITC) final determination on “industry injury” at the end of May before it can take effect. According to official statements, the ITC has preliminarily determined that the US industry has indeed suffered harm, making the likelihood of the final ruling passing very high.
Statistics show that in 2024, the US imported solar products from these four countries totaling over $10 billion, covering a significant portion of the American market’s major supplies. The tariff announcement also details the final tax rates for numerous companies, mostly higher than the preliminary figures released at the end of last year.
Cambodia:
Due to non-cooperation from most companies in the investigation, the tax rates are exceptionally high. Several Chinese-invested companies, including Hounen Solar, Solar Long, and Jintek Photovoltaic, face a composite rate of 3,521.14%. Other industry players generally face rates around 651.85%.
Malaysia:
There is a significant disparity in tax rates. One of the complaining parties, Hanwha Q Cells, is only subject to a 14.64% tariff, whereas Chinese firm JinkoSolar faces a 40.30% rate, and Baojia New Energy faces a high rate of 250.04%.
Thailand:
Trina Solar is levied a 375.19% tax, with companies like Taihua New Energy facing rates as high as 972.23%.
Vietnam:
Most companies face composite tax rates ranging from 120% to 300%. Companies such as GEP New Energy and HT Solar face a high tax rate of 813.92% due to significant dumping and subsidy levels.
Additionally, the US Department of Commerce clearly states that solar cells and modules will be treated as “like goods” and be subject to the same tariffs. This means that even unassembled solar cells cannot evade taxation through product classification.
Timothy Brightbill, representing the American Alliance for Solar Manufacturing Trade Committee, expressed confidence that these tariffs will effectively curb unfair trade practices by Chinese companies in the four countries, practices that have long-term damage to the US solar manufacturing industry. He added, “This confirms our long-standing observation that Chinese-based companies have been exploiting institutional loopholes, engaging in price cutting competition, and causing American workers to lose jobs and livelihoods.”
However, industry groups like the Solar Energy Industries Association (SEIA) and the American Clean Power Association (ACP) have expressed opposition, fearing that the tariffs will raise the cost of imported solar cells and modules, affecting domestic module assembly capacity and solar promotion programs in the US.