US Duties on Southeast Asian Solar Panel Exports: Where the Sun Does Not Shine

Beginning in mid-June 2025, US buyers are paying higher duties on solar panel imports from four Southeast Asian countries, namely, Cambodia, Malaysia, Thailand, and Vietnam. By levying the higher duties, Washington is seeking to curb China-manufactured panels exported to the US via these countries. Given the trade tensions between Washington and Beijing, these duties will continue to feature in the US’ arsenal of options to manage what it deems to be unfair trade practices.

The higher duties follow a unanimous vote by the US International Trade Commission to uphold the investigation findings and sanctions proposed by the US Department of Commerce (DOC).  The investigation, which was prompted by a petition filed by a coalition of US solar manufacturers, examined unfair trade practices by solar panel exporters in the four countries in the form of dumping and subsidised solar panels.

The new import duties are a combination of antidumping duties (ADs) and countervailing duties (CVDs).  The duties levied are exporter/producer-specific and country-specific. For exporting companies that are not on the AD-CVD list, country-specific AD and CVD rates will apply. The combined AD and CVD rates vary greatly across firms and countries, ranging from 14.6 per cent (for example, Hanwha Q CELLS Malaysia Sdn Bhd in Malaysia) to 3,529.3 per cent (for example, Hounen Solar Inc Co Ltd in Cambodia) (Table 1). 

Tackling Problem of Chinese Dumping

Table 1.

New US Antidumping and Countervailing Duties on Solar Panel Imports

from Selected Southeast Asian Economies

	Anti-Dumping Margin (ADM)	Countervailing Duty (CVD)	ADM+CVD
Cambodia	125.4	534.7-3,404.0	660.0-3,529.3
Malaysia	0.0-81.2	14.6-168.8	14.6-250.0
Thailand	111.4-202.9	263.7-799.5	375.2-1002.4
Vietnam	58.1-271.3	68.1-542.6	126.2-813.9

This is not the first time that the US has imposed import duties on solar panels. In the past, import duties were imposed to protect the US solar panel industry following surges in imports of such panels, especially from China. The solar panel imports by the US increased from US$2 billion in 2009 to US$6 billion in 2012 (Figure 1). China accounted for nearly 90 per cent of the import surge. Subsequently, the import share of China in the US solar panel market increased from 13 per cent in 2008 to 47 per cent in 2011. In response, the US government imposed three-digit import duties based on AD and CVD on Chinese solar panels in 2012. As a result, total solar panel imports stagnated from 2012 to 2014. 

On the Up and Up

Figure 1.

US Solar Panel Imports from Selected Asian Economies, 2006-2024:

Total (US$ mil) and Market Share (%)

Note: Solar panels refer to products under HS 854140, 854142 and 854143.

In 2018, the Trump Administration imposed a 30 per cent tariff on solar panel imports in response to the rising imports of solar panels between 2015 and 2016. This was undertaken using the “global safeguard measures” under Section 201 of the Trade Act, which did not require proof of dumping. The effect was immediate — solar panel imports plunged in 2018 before recovering in the following three years, driven by imports from Vietnam. In June 2022, the Biden Administration announced a two-year temporary suspension of tariffs on solar panel imports from Cambodia, Malaysia, Thailand, and Vietnam. The “solar bridge” policy sought to support domestic solar panel installations while waiting for domestic manufacturers to ramp up their production. A month before the end of the solar bridge policy, the Biden administration shifted its attention to the persistent and large volume of solar imports from Southeast Asian countries. This was attributed to the circumvention of antidumping and countervailing duties by solar manufacturers from China. 

At the core of the ADs and CVDs is the “Particular Market Situation“ (PMS) provision, which has become a workhorse for the DOC to calculate dumping margin and/or countervailing subsidies since 2015. In the solar panel case, PMS takes the form of artificially low prices of solar exports from Southeast Asia due to the use of imported, subsidised, and dumped inputs from China in these countries.  

The new import duties on solar imports from these four economies have created more uncertainty in trade, over and above the on-and-off tariff threats by the US.

The new ADs and CVDs will have an immediate impact on the solar panel exports from Cambodia, Malaysia, Thailand, and Vietnam. It is estimated that the US market accounts for more than 85 per cent of the total solar panels exported from each of these four countries. Due to the lower AD and CVD levied on Malaysia, the country’s solar panel exports to the US will become more competitive compared to the other three countries. 

For the four countries, re-routing their solar panel exports elsewhere would take time. Though the solar panel exports of Laos and Indonesia to the US are likely to become relatively more competitive, they could face similar trade remedy measures in the future. It remains to be seen whether Laos and Indonesia could replace any reductions in US imports from the four Southeast Asian countries.  

The new import duties on solar imports from these four economies have created more uncertainty in trade, over and above the on-and-off tariff threats by the US. The PMS provision provides the DOC with greater and more flexible powers that can be used more frequently and are less susceptible to judicial challenge. Hence, Southeast Asian-based companies exporting to the US will incur greater risk amid the growing protectionist sentiments.

As the trade war between the US and China is expected to continue in the foreseeable future, AD-CVD duties will continue to be important trade policy instruments for the US. Chinese manufacturers will continue to mitigate the US’ response by shifting their factories to other emerging countries. However, this strategy can only be sustainable if they source more inputs domestically in these host countries.

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