Up to 3521%! Southeast Asia's solar anti-dumping and countervailing duties land, what should China's solar industry do?

Abstract:

Under the crisis of tariffs, the global trend of deglobalization has emerged, and the supply of photovoltaic will show a decentralized trend. Local production capacity layout may become a new direction for the globalization of the current photovoltaic supply chain and a good way to cope with uncertainty.

 

Written by | Penn

Edited by | Tang

→This is the 1490th original article of "Global Zero Carbon"

 

For the photovoltaic industry, April 2025 is really a time of upheaval.

 

On April 2, local time, US President Trump announced the imposition of "reciprocal tariffs" of varying levels on all trading partners, including a proposed 34% tariff on China. Subsequently, the US repeatedly raised tariffs on China, bringing the cumulative US tariffs on China to 145%.

 

For photovoltaic products, the Biden administration had previously raised tariffs on Chinese solar cells and modules from 25% to 50%, and the additional 145% tariff imposed by the US on Chinese products has brought the maximum tariff on Chinese photovoltaic products exported to the US to 195%.

 

Previously, in order to cope with the import barriers imposed by the United States on photovoltaic products from China, Southeast Asia became the only large-scale production base of China's photovoltaic industry chain overseas, serving as a springboard and policy buffer zone for Chinese photovoltaic products to the United States. Now, Southeast Asian countries have also become the key targets of Trump's "reciprocal tariffs," and the US anti-dumping and countervailing duties "big stick" on photovoltaic products from four Southeast Asian countries (Cambodia, Malaysia, Thailand, and Vietnam) has officially landed.

 

On April 21, local time, the US Department of Commerce announced its final determination in anti-dumping (AD) and countervailing duty (CVD) investigations on solar cells (whether or not assembled into modules) from Cambodia, Malaysia, Thailand, and Vietnam.

 

The US Department of Commerce ultimately determined that anti-dumping duties on solar products from the four Southeast Asian countries ranged from 0% to 271.28%, depending on the company and country. The countervailing duties determined based on the country of origin of the product are: Cambodia up to 3403.96%, Thailand up to 799.55%, Vietnam up to 542.64%, and Malaysia up to 168.80%. Tariff rates vary by company and country, but are generally higher than the preliminary tariffs announced at the end of last year.

 

To finalize the tariffs, the US International Trade Commission must vote on the decision in June.

 

Figure: The US imposes anti-dumping and countervailing duties of up to 3521% on solar cells from Southeast Asia

Source: Bloomberg

 

The US Department of Commerce said the announced tariffs are the final result of a year-long trade investigation. The investigation, launched last April by South Korea's Hanwha Q CELLS, US-based solar manufacturer First Solar, and several smaller producers, aimed to protect their multi-billion dollar investments in US solar manufacturing.

 

In their petition, they accused Chinese companies with factories in the four Southeast Asian countries of flooding the US market with low-priced products, causing price drops of more than 50% and threatening their US-made products.

 

"This is a very strong outcome," claimed Tim Brightbill, a lawyer for the American Manufacturing Association, in an interview, stating that the "unfair trade practices" of Chinese companies in Malaysia, Cambodia, Thailand, and Vietnam have "long been harming the US solar manufacturing industry."

 

In the final anti-dumping and countervailing duty determination, Hanwha Q CELLS' Malaysian products faced the lowest total anti-dumping and countervailing duties, at only 14.64%. Because Cambodian producers chose not to cooperate with the US investigation, the total anti-dumping and countervailing duties on solar products from four manufacturers, including Hounen Solar and ISC Cambodia, will reach as high as 3521.14%.

 

For Chinese companies, the total anti-dumping and countervailing duties imposed by the US on JinkoSolar's Malaysian products are the lowest, at 40.30%; the highest tariffs imposed on Trina Solar's products manufactured in Thailand are 375.19%. For photovoltaic products exported from Vietnam to the US, JA Solar faces 120.64% anti-dumping and countervailing duties, Trina Solar faces 201.69%, and JinkoSolar faces 244.95%.

 

Figure: Anti-dumping and countervailing duties on four Southeast Asian countries

Source: US Department of Commerce, Solar Power World

 

In addition to the recently imposed anti-dumping and countervailing duties on photovoltaic products, Southeast Asian countries have also become key targets of Trump's "reciprocal tariffs." Specifically, the US will impose a 49% tariff on Cambodia, followed by Laos, which will be subject to a tariff as high as 48%. In addition, the US will impose a 46% tariff on Vietnam, a 44% tariff on Myanmar and Sri Lanka, a 36% tariff on Thailand, a 32% tariff on Indonesia, and a 24% tariff on Malaysia.

 

Although the US issued a 90-day tariff suspension order on April 9, US President Trump said that the basic 10% tariff will still apply to all regions except China. At the same time, Trump launched intensive negotiations with a 90-day limit, hoping that allies and major trading partners will make concessions in exchange for US tariff exemptions, which makes the tariffs imposed on the US by various countries still face great uncertainty.

 

Therefore, under the double blow of US anti-dumping and countervailing duties and "reciprocal tariffs," the status of the green channel for Chinese photovoltaic products to export to the US via Southeast Asia is on the verge of collapse. Currently, the start-up of the photovoltaic cell production in these four Southeast Asian countries (Cambodia, Vietnam, Malaysia, Thailand) has basically stalled.

 

Figure: Newly imposed tariffs by the US on ASEAN countries

Source: CNA

 

A research report from CITIC Securities pointed out that Trump's additional tariffs have two major impacts on the new energy industry: first, who bears the tariff cost. If most of it is borne by US customers, then the decline in the gross profit margin of Chinese new energy companies' products will be limited. On the other hand, after the additional tariffs, the actual local selling price of photovoltaic products and other products will increase, reducing their economic efficiency, which may suppress some demand. In the long run, local expansion of production by new energy companies in the United States is the most effective way to cope with this round of tariff shocks.

 

In preparation for the restart of "double investigations" in Southeast Asia, China's leading photovoltaic manufacturers have been accelerating their plans to build factories in the United States in recent years. Among them, integrated leading manufacturers like Trina Solar and LONGi Green Energy have taken the lead in putting production into operation, with 5GW of module production capacity already in operation and starting to ship products. In addition, JinkoSolar, JA Solar, and Trina Solar also have production capacity layouts in the United States.

 

Data from Dongwu Securities shows that existing domestic PV production capacity in the US is mainly concentrated in the component sector, with core components such as battery cells mostly reliant on imports, ultimately completing component manufacturing in the US. As of January 2025, mainstream PV companies have planned a total component production capacity of over 68GW in the US, with 40GW already in production; among them, Chinese and US companies have respectively planned over 28GW.

 

Image description: Planned production capacity of mainstream PV companies in the US

Source: Dongwu Securities

 

Since last year, after the "double anti-dumping" tariffs on PV products from four Southeast Asian countries were gradually increased, some Chinese PV manufacturers also moved to nearby Indonesia and Laos for production. In December 2024, the proportion of components imported from the four Southeast Asian countries to the US dropped to 55%, while the proportion from other countries of origin, including Indonesia and Laos, increased significantly. BNEF had predicted that countries with lower overall tariffs, such as Indonesia and Laos, would become the largest PV export markets to the US.

 

Trina Solar stated that its Indonesian joint venture TOPCon battery component factory (currently with an annual capacity of 1 GW) is not affected by the "double anti-dumping" measures from the four Southeast Asian countries, and that the recently announced tariff rates in Indonesia are relatively low, making its Indonesian factory more competitive.

 

At the same time, many manufacturers have also turned their attention to the Middle East, hoping to use it as a replacement for Southeast Asia and continue to export to the high-premium US market to obtain excess profits. Currently, the Middle East and surrounding regions face lower tariffs and will benefit from the next round of PV industry migration dominated by Chinese manufacturers, accelerating the rise of PV manufacturing and demand.

 

According to incomplete statistics from CITIC Securities, as of April 2025, Chinese PV companies have production capacity layouts in the Middle Eastern countries of the UAE, Oman, and Saudi Arabia, covering all aspects from silicon materials, silicon wafers, battery cells, components, and brackets.

 

Image description: Layout and planning of Chinese PV companies' production capacity in the Middle East

Source: CITIC Securities

 

In addition, Turkey has a battery cell production capacity of 6GW, and faces a total tariff rate of only 24% (14% from Section 201 tariffs, 10% from countervailing tariffs). Although production costs may be higher than in India and Southeast Asia, Turkey could still become the biggest winner in PV exports to the US. From silicon wafers and cells to components, Chinese companies are using Turkey as a springboard to restructure the global renewable energy industry chain.

 

At the end of March this year, CHINT New Energy reached an agreement with the Turkish government to invest in the construction of a solar cell factory, which will be the first wholly foreign-owned solar cell factory in Turkey. It is reported that the construction of this factory is an important part of Turkey's "High-Tech Incentive Program (HIT-30)". CHINT New Energy will build an advanced TOPCon battery production line, and plans to export 80% of its capacity.

 

Image description: Layout of core enterprises in Turkey's PV industry chain

Source: KuaFu New Energy Research Institute

 

With stricter tariff policies, manufacturers need to actively adjust their overseas production capacity layout to maintain market competitiveness. Under the trend of increasing localization requirements (especially in the component sector), the proportion of direct exports of upstream and midstream links in the industry chain, such as silicon materials, silicon wafers, batteries, and supporting materials, is accelerating, becoming a new direction for the globalization of the PV supply chain, and pushing the Chinese PV industry into the "going global 2.0" stage.

 

Under the changes in the global supply chain, whoever can first achieve flexible response and cost optimization is more likely to occupy a favorable position in future competition.