Policy Alert: Forthcoming Tariffs on Solar Products

On April 21, the Department of Commerce announced the conclusion of a year-long anti-dumping countervailing duties (AD/CVD) investigation into solar cell imports from four Southeast Asian countries, setting new tariff rates for various foreign companies nearly as high as 3500%. The move is seen as a win for domestic solar manufacturing companies seeking remedy for alleged unfair trade practices by Southeast Asian firms headquartered in China. While these rates have been determined, the tariffs will not go into effect until an affirmative vote by the International Trade Commission (USITC) in June on whether the unfair trade practices have resulted in material injury to the US solar industry.

Key Insights

• AD/CVD investigations address alleged unfair trade practices, with duties used to provide relief to US industries and workers “materially injured” because of imports of similar products sold in US markets at less than fair value (AD) or subsidized by a foreign government or public entity (CVD). This process is jointly administered by the USITC, focused on alleged material injury, and the Department of Commerce’s International Trade Administration (ITA) determining the alleged amount of dumping or subsidy. Statutory authority to conduct these investigations and levy relevant duties is in the Tariff Act of 1930.
• These countervailing and anti-dumping duties stack on top of other tariffs facing these countries. These include existing section 201 solar tariffs scheduled to end on February 2026 and to “reciprocal" tariffs that took effect on April 5, 2025 with a baseline 10% rate that is scheduled to increase to 46% for Vietnam, 24% for Malaysia, 36% for Thailand, and 49% for Cambodia on July 9, 2025 absent new trade agreements with those countries.
• The original April 2024 petition issued by the American Alliance for Solar Manufacturing Trade Committee, which represents a coalition of seven member and supporter companies, alleged large Chinese solar panel makers with factories in Malaysia, Cambodia, Thailand, and Vietnam of shipping panels priced below their cost of production and of receiving unfair subsidies that make American goods uncompetitive. The petition resulted in a May 2024 announcement initiating the AD/CVD investigation and an October 2024 preliminary affirmative determination of countervailing duties.
• China dominates global solar photovoltaic supply chains, accounting for over 80% of all global manufacturing of solar panels. While Chinese industrial policies have bolstered overall solar product manufacturing and driven costs down, this concentration of manufacturing capacity has caused concern across industry leaders and policy makers seeking greater diversification in the solar industry’s supply chain. In recent years, Republicans and Democrats have also cited national security concerns and alleged use of slave labor.