The US has implemented new tariffs on solar imports from Cambodia, Vietnam, Malaysia, and Thailand, with rates reaching as high as 3,521%.

This decision follows a yearlong investigation by the Commerce Department, which found that manufacturers in these countries received unfair subsidies and sold products below production costs.

Cambodia faces the highest duties for failing to cooperate, while Vietnam, Thailand, and Malaysia face varying rates depending on the company and export origin.

The US International Trade Commission will decide whether these imports harm US industry, though some firms are already shifting production to avoid future duties.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ History shows tariffs may create more solar losers than winners

The current solar tariffs follow a pattern established by previous trade actions, which consistently resulted in unintended consequences for the broader industry.

When President Trump imposed 30% solar tariffs in 2018, the Solar Energy Industries Association (SEIA) projected approximately 23,000 job losses and an 11% reduction in installations between 2018-2022, significantly hampering industry growth1.

Those tariffs, like today’s, aimed to revitalize domestic manufacturing but failed to account for industry structure. The downstream solar sector (installation and project development) employs over 50% of the solar workforce, making job losses in installation likely to exceed manufacturing gains2.

Previous tariffs also failed to stimulate meaningful domestic manufacturing growth, with U.S. solar production remaining below 5% of market share despite multiple rounds of trade protections over the past decade2.

The extreme rates announced now (up to 3,521%) represent an unprecedented escalation in solar trade policy that could amplify negative effects across the renewable energy landscape.

2️⃣ Tariff circumvention remains the persistent industry response

Solar tariffs consistently trigger manufacturing relocations rather than domestic production increases, creating a predictable pattern of trade flow adjustments.

After similar duties were imposed on Chinese solar imports approximately 12 years ago, manufacturers shifted operations to Southeast Asian countries that weren’t affected by the tariffs, creating the very supply chains these new duties now target3.

This cycle is already repeating, with Indonesia rapidly expanding from just 1 gigawatt of foreign-owned solar manufacturing capacity in 2022 to more than 20 gigawatts expected by mid-2024, according to BloombergNEF data3.