The United States will impose high anti-dumping tariffs (Anti-Dumping Duty·AD) and countervailing duties (CVD) on Chinese solar products produced in Southeast Asia starting in June. If sales of cheap solar products decrease, domestic companies that have entered the U.S. market, such as Hanwha Solutions, are expected to benefit.
On the 21st (local time), Reuters reported that the U.S. Department of Commerce announced the results of its investigation into AD and CVD on solar cells and products such as panels produced in four Southeast Asian countries: Malaysia, Cambodia, Thailand, and Vietnam. The Department of Commerce stated that products produced in these Southeast Asian countries were being dumped into the domestic market, and it also identified that they received subsidies from the Chinese government through the countervailing duty investigation.
The U.S. International Trade Commission (International Trade Commission·ITC) also held a recent public hearing to discuss the damage caused to the domestic industry by imports of Southeast Asian solar products. Based on discussions in the ITC, the Department of Commerce concluded that the damage caused by low-priced Chinese solar products circumventing Southeast Asia was serious and decided to impose high tariffs. This decision will be finalized in June if the ITC determines there was damage to the domestic industry.
The American Alliance for Solar Manufacturing Trade Committee, consisting of seven solar companies, including First Solar and Mission Solar, requested an investigation into low-priced imported solar products from Southeast Asia last April.
The committee claimed that most of the companies exporting products made in Southeast Asia to the U.S. are Chinese companies. They stated that Chinese companies have been circumventing tariffs by producing solar products in Southeast Asia for export. U.S. companies petitioned for an investigation, stating that solar products from Chinese manufacturers with factories in Southeast Asia have led to oversupply and a sharp drop in international prices.
In recent years, imports of solar panels and solar cells from Southeast Asia to the U.S. have surged. According to the Korea Energy Economics Institute, approximately 80% of the solar products currently imported by the U.S. are produced in the four countries—Cambodia, Malaysia, Thailand, and Vietnam—which are subjects of the Department of Commerce's investigation.
The tariffs announced by the Department of Commerce this time will be applied differently depending on the corporation and country. In the case of anti-dumping tariffs, they will range from 6.1% to 271.28%, while countervailing duties will reach 14.64% to 799.55%. When combined, some companies could face tariffs exceeding 1000%.
Due to the actions of the Department of Commerce, Chinese solar companies exporting to the U.S. through Southeast Asia are facing a direct hit. Jinko Solar, the largest Chinese solar module manufacturer with a factory in Malaysia, will be subjected to a total tariff of 44.48%, which includes an anti-dumping tariff of 6.1% and a countervailing duty of 38.38%. Another Chinese solar company, Trina Solar, and Taihua New Energy will face tariff rates of 375.19% and 1002.45%, respectively, for products made in Thailand.
If the high tariffs are confirmed, imports of solar products from Southeast Asia to the U.S. are expected to plummet starting in June. In that case, solar products from South Korea and India could fill the gap left by the Southeast Asian products. While the Department of Commerce applies high tariffs to products from Chinese companies produced in Southeast Asia, it decided not to impose anti-dumping tariffs on Hanwha Solutions' Qcells products produced in Malaysia, only applying a countervailing duty of 14.64%.
Hanwha Solutions is investing a total of 3 trillion won to build an integrated production facility called 'Solar Hub' in Cartersville, Georgia, that can produce solar products such as modules, solar cells, ingots, and wafers. The solar facility will cut ingots, which are cylindrical crystals made of polysilicon, into wafers and produce solar cells that convert sunlight into electricity. A solar module is made by combining several solar cells into a panel shape.
If the Solar Hub is completed within this year, Hanwha Solutions will be able to increase its local production ratio in the U.S. to about 70%. If the U.S. sales of Chinese companies via Southeast Asia are halted or decreased, Hanwha Solutions, which produces most solar products, could gain substantial benefits.
Hanab Securities noted, 'The import volume of Southeast Asian solar modules to the U.S. has already plummeted, and there is a high likelihood that subsidies for Chinese module companies in the U.S. will be discontinued by the Donald Trump administration,' adding, 'There is a strong possibility that Hanwha Solutions' capabilities will be maximized this year.'