Facing high tariffs imposed by the United States, Chinese solar manufacturers are quietly assembling product equipment in Indonesia and then exporting the products to the American market. The tax-free enclave of Bintan Island in Indonesia has become a key node in the complex global landscape. However, President Trump’s new round of crackdown could soon close this loophole in the global “cat-and-mouse” trade strategy.
According to a report by Bloomberg on July 24, in the first half of 2025, the top ten solar cell and panel exporters in Indonesia exported products worth $608 million to the United States. Bloomberg found that six of these companies were registered and operated on Bintan Island, with their ultimate beneficial owners being senior executives of Chinese solar companies. These companies accounted for nearly 70% of Indonesia’s total exports to the United States.
In early July, a coalition of U.S. solar manufacturers including First Solar Inc. and Mission Solar Energy filed trade complaints against Indonesia, India, and Laos. They alleged that Chinese companies exploited a loophole in the trade system by massively dumping low-cost products produced in these three Asian countries into the American market. This prompted the U.S. International Trade Commission to launch investigations into anti-dumping and anti-subsidy allegations.
“Under President Trump’s leadership, the United States is no longer a dumping ground for cheap imported products that harm our industries and workers,” said White House spokesperson Kush Desai. “While the Commerce Department conducts anti-dumping investigations into solar panels, the U.S. government is also closely monitoring transshipment and other efforts to undermine our tariff policies.”
The Trump administration has yet to disclose a specific definition of transshipment. It is currently unclear whether these Chinese-backed solar companies on Bintan Island are indeed transshipping products to Indonesia to evade high U.S. solar tariffs, or if these companies are genuinely producing products on the island and being considered Indonesian-made.
The Indonesian government agency BP Bintan Island has stated that it has not received any confirmation of initiating anti-dumping investigations. In response to inquiries from Bloomberg News, BP Bintan Island indicated that the company is working closely with central authorities and local governments to support fair and transparent international trade.
The company stated: “Up to now, partner countries have recognized and appreciated the role played by the Indonesian government, BP Bintan Island, and the Bintan Municipality in responsibly addressing global trade dynamics.”
More than a decade ago, when Western countries imposed tariffs on Chinese solar products, Chinese manufacturers simply shifted production to Vietnam, Malaysia, and Thailand. By 2024, Southeast Asia had become the largest exporter of solar products to the United States. Subsequently, the U.S. government took action to close this loophole.
Under former President Biden’s leadership, the U.S. Department of Commerce initiated anti-dumping and anti-subsidy investigations against Cambodia, Vietnam, Malaysia, and Thailand. This yearlong investigation revealed that manufacturers were dumping low-cost export products into the U.S. market below production costs. Then, in April under President Trump’s administration, solar products from these four Southeast Asian countries faced tariffs as high as 3521%.
“Chinese-based solar companies have been deceiving the market by competing at profit margins lower than U.S. companies and harming American workers’ livelihoods,” said Tim Brightbill, co-chair of international trade at Wiley’s law firm in April. Brightbill is the chief legal advisor to the U.S. Solar Manufacturing and Trade Alliance, comprising U.S. solar companies that successfully pressured the U.S. Department of Commerce into conducting investigations.
The tariffs imposed in April forced U.S. buyers to readjust their procurement strategies. Indonesia was not bound by the ruling, becoming one of the biggest beneficiaries. However, Bintan Island has now become the focus of international attention.
“With the increasing scrutiny of exported products in the Southeast Asia region, factories are constantly relocating like a game of cat-and-mouse,” said Niclas D. Weimar, technical director of Sinovoltaics, a solar industry compliance and quality assurance company based in the Netherlands and Germany.
Over the past two years, some of China’s largest solar companies have set up shop in Indonesia, directly producing solar panels for the U.S. market. According to U.S. Customs data, from January to May this year, Indonesia exported a total of $733 million worth of solar products to the United States, a 350% increase year-on-year.
For instance, PT Rec Solar Energy Indonesia is currently the largest solar product exporter to the U.S. from Indonesia. In the first half of 2025, the company shipped solar panels worth $219 million across the Pacific, almost its entire output. According to information from its parent company NE Solar (a Cambodian company established in 2022), the company began exporting solar panels from Bintan Island in 2023.
The surge in solar product exports to the U.S. is not limited to Indonesia. U.S. trade data shows that Laos, unaffected by the April tariff ruling, saw its solar exports skyrocket from almost zero at the beginning of 2024 to $717 million in the first five months of this year. India’s solar exports also jumped from $10 million in 2022 to $345 million this year.
If the U.S. International Trade Commission finds unfair trade practices in Indonesia, Laos, and India during the investigation, a new round of tariffs could be swiftly implemented.