The U.S. Department of Commerce has determined that solar cell imports from four countries in Southeast Asia should face tariffs of up to 3,521 percent.
The decision is the result of an investigation started last year at the request of seven U.S. solar manufacturers, which argued that companies in Thailand, Vietnam, Cambodia and Malaysia were exporting solar components at artificially low prices, made possible by support from China.
The highest rates — 3,521 percent — landed on Cambodian companies that stopped cooperating with the investigation. The inquiry found that, on average, solar cells from the four Southeast Asian countries were being discounted at rates of 34 percent to 652 percent.
Now, the International Trade Commission, which has been conducting its own review, will determine whether these solar imports have harmed U.S. manufacturers. The fees will go into place if it decides the answer is yes.
China currently controls more than 80 percent of the supply chain for solar panels globally, according to the International Energy Agency. In theory, high import tariffs combined with manufacturing subsidies could shelter the U.S. solar industry as companies build factories and position themselves to better compete.
But making up that ground is a tall order: Chinese companies make solar panels for 16 to 19 cents per watt, while American companies face costs of about 28 cents, according to an estimate last year.
In practice, experts say that any benefits from the new fees will be distributed unevenly, and that increased U.S. isolation is not likely to result in a better, cheaper domestic supply chain for solar power.
The end result? Some overseas factories might move from the targeted countries to nations with lower tariffs. A few solar suppliers will get a leg up. And buyers of U.S. solar power may have to pay more for energy.
But, at least for now, the added costs are unlikely to slow the rollout of solar power in the United States, said Pol Lezcano, a solar analyst at BloombergNEF, a research group. Even if it becomes a little more expensive, solar remains one of the cheapest and quickest-to-build energy sources, he said.
What is ‘dumping’?
U.S. companies who feel they’ve been hurt by cheap imports can petition the government to investigate whether other countries are unfairly subsidizing some industries or “dumping” products, which is defined as selling a product below the cost of production or below domestic prices. The government can then impose duties on products from those countries or companies.
This process tends to be pretty favorable toward companies that file petitions. The U.S. imposed duties in about 74 percent of cases that it was asked to investigate between 2011 and 2021, according to a report by the Government Accountability Office.
It can be difficult to replicate the government math that establishes specific penalties, Lezcano said. “It’s gotten to a point where we don’t even bother,” he added. “We just look at the final tariff values.”
It’s perhaps worth noting that U.S. companies often dump exports without much consequence. Pharmaceutical firms, for example, routinely sell medicines abroad at far lower prices than they charge at home, said Gregory Nemet, a professor of public affairs at the University of Wisconsin-Madison.
And of course the U.S. subsidizes its own strategic industries, including renewable energy through the 2022 Inflation Reduction Act. U.S. solar manufacturing subsidies are considerable, Lezcano said, adding, “It’s quite the irony that you’re accusing other countries of dumping when you’re essentially subsidizing more than what it actually costs to produce a best-in-class new solar module in China.”
A decade of anti-dumping fees
Solar products from China have been a target of anti-dumping fees since the Obama administration, which imposed 24 to 36 percent tariffs, a policy that cratered exports from China to the U.S.
But then Chinese companies began investing in solar facilities in Southeast Asia, where an export market sprang up. In 2023, the U.S. imported $11.9 billion in solar cells from Vietnam, Malaysia, Cambodia and Thailand, according to the International Trade Administration.
U.S. manufacturers argued that Chinese subsidies didn’t really go away — they were just embedded in low prices from these new markets. Today, companies in China typically make solar cells, which are shipped to Southeast Asia and assembled into panels, Nemet said.
A few clear winners
Because many U.S. solar manufacturers rely on equipment and cells made in China, their costs will go up with the fees on Southeast Asian companies and escalating tariffs on products from China, Lezcano said.
As for factories in Cambodia, Thailand, Vietnam and Malaysia? They can pack up and move elsewhere — to Laos, for example — within six months, Lezcano said. The profit margins on solar exports to the U.S. are high enough that relocation will be worth it, even with continuing tariff uncertainty.
Perhaps the biggest winner in all this is First Solar, one of the U.S. companies that called for the investigation, Lezcano said. Its supply chain is less reliant on Chinese companies than many of its competitors’ are. In a press call this week, a lawyer for the companies that filed the petition hailed the Commerce Department decision.
More consequentially, the industry is bracing for the possibility that Republicans in Congress will roll back the tax breaks and subsidies in the Inflation Reduction Act. First Solar’s stock price jumped on the news of the Commerce Department levies, but it remains down 39 percent since the November election.
Regulation
Interior Department to fast-track oil, gas and mining projects
The Interior Department said late Wednesday that it would fast-track approvals for projects involving coal, gas, oil and minerals on public lands, arguing that President Trump’s declaration of an energy emergency allowed it to radically reduce lengthy reviews required by the nation’s bedrock environmental laws.
Environmental reviews that typically take a year to complete would be finished in 14 days, administration officials said. More complicated environmental impact statements that usually take two years would be completed in 28 days, they said.
“The United States cannot afford to wait,” Doug Burgum, the Interior secretary, said in a statement. — Lisa Friedman
Pollution
Almost Half of Americans Breathe Unhealthy Air, Report Finds
At least 156 million Americans, about 46 percent of the population, live with unsafe levels of ozone, particulate pollution or both, according to the American Lung Association’s annual State of the Air report.
Plans by the Trump administration to loosen environmental regulations and cut funding for air quality research would make matters worse, the report says.
“The biggest thing that has saved patients’ lives in regard to lung health and overall health is the Clean Air Act,” said Dr. Panagis Galiatsatos, a pulmonologist at the Johns Hopkins School of Medicine and spokesman for the lung association. “Clearly, legislation is needed, because that’s what dictates the air quality you breathe.” — Rebecca Dzombak
More climate news:
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The Washington Post reports that the Trump administration is considering shrinking the size of at least six national monuments in the West to make way for mining and oil ventures.
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Vox argues that it’s not time to panic over the energy demands of data centers and artificial intelligence — at least not yet.
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In an apparent jab at President Trump’s policies, China will “not slow down its climate actions,” despite rising protectionism, Xi Jinping, China’s president, said Wednesday in a speech covered by the The Guardian.
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Claire Brown covers climate change for The Times and writes for the Climate Forward newsletter.
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