US Trade Tensions Impact Southeast Asia’s Solar Panel Production

Southeast Asia’s growing solar industry faces uncertainty due to possible new tariffs from the US. This region, which includes countries like Thailand, Vietnam, Malaysia, and Cambodia, is a major player in global solar panel production, second only to China. However, the US is considering imposing heavy tariffs on solar products from these countries.

Chinese companies that have built factories in Southeast Asia to avoid US tariffs on their products from China are now under scrutiny. Companies like Longi Green Energy and Trina Solar are already scaling back their operations in these countries. These four Southeast Asian nations account for over 40% of solar module production outside China. Some Chinese firms are now looking to relocate their production to places like Indonesia, Laos, or the Middle East.

The US is investigating whether Chinese manufacturers are illegally avoiding tariffs. This investigation could lead to tariffs as high as 272% on solar products from the region. Currently, tariffs on solar panels from China are 25%, and there are plans to increase these.

Recent reports indicate that Longi has stopped several production lines in Vietnam and is reducing operations in Malaysia, while Trina and Jinko Solar are also scaling back. Longi has stated that it is adjusting its production plans due to these trade policy changes but still expects its factories in Southeast Asia to serve markets like India and Canada. Trina is waiting for the outcome of the US investigation before making further decisions, and Jinko did not comment on the situation.

Some experts believe that not all factories will close. Products from Southeast Asia could still be sold in India, Europe, and other regions. Older plants might shut down, but newer ones could survive if they find new markets.

The US is expected to decide on these tariffs early next year, possibly sooner if it benefits the Democrats in the upcoming election. The US’s tougher stance on trade with China might also impact its efforts to reduce carbon emissions, as more than 75% of its solar product imports came from Southeast Asia last year.