US solar manufacturers are urging the International Trade Commission (ITC) to close a potential tariff loophole that could allow a surge of tariff-free solar imports from Southeast Asia.

The ITC recently ruled that solar imports from Cambodia, Malaysia, Thailand, and Vietnam are harming US producers, opening the door for steep new duties.

This determination paves the way for duties ranging from 34% to 3,521%, depending on the country and manufacturer

The American Alliance for Solar Manufacturing wants the ITC to finalize and publish the ruling by June 2, 2025 to prevent untaxed imports already in storage from entering the market.

Research firm Wood Mackenzie estimates that developers stockpiled up to 50 gigawatts of panels in 2024, while US manufacturers say cheap imports have undermined domestic competitiveness.

Last year, the US imported US$12.9 billion in solar equipment from the region, accounting for nearly 80% of all shipments, separate from earlier Trump tariffs.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Tariff history shows manufacturing relocation rather than domestic revival

The current tariff situation repeats a pattern seen since the 2012 anti-dumping duties imposed on Chinese solar panels, which merely shifted manufacturing to Southeast Asia rather than significantly boosting U.S. production 1.

Despite multiple rounds of solar tariffs over the past decade, U.S. manufacturing capacity has remained limited, with the country’s global market share dropping to less than 5% even after previous protective measures 2.

Historical data shows that after the 2018 tariffs (which started at 30%), U.S. solar installations decreased by an estimated 11% over a four-year period, as the increased costs offset some of the intended benefits for domestic manufacturers 3.

The current situation demonstrates how manufacturers continually adapt to tariff regimes, with experts already predicting shifts from the targeted Southeast Asian countries to alternative locations like Indonesia or Laos to avoid the new duties 4.

This pattern of tariff implementation followed by manufacturing relocation represents a significant challenge for policymakers attempting to build sustainable domestic production capacity through trade measures.

2️⃣ Scale remains the critical competitive disadvantage for U.S. manufacturers

Despite recent growth in U.S. solar manufacturing capacity to over 31 GW (a 25% year-over-year increase), American producers continue to struggle with fundamental cost disadvantages against foreign competition 5.