Skip to main content
Energy

Chinese solar manufacturers shift operations to bypass US tariffs


Chinese solar panel manufacturers have a strategy for circumventing U.S. trade restrictions, responding to new tariffs by relocating production facilities to countries less affected by American policies. This shift has impacted the solar industry in Southeast Asia, following the U.S. Commerce Department’s implementation of duties reaching as high as nearly 300% that are targeted at Chinese-owned factories in the region.

Media Landscape

See who else is reporting on this story and which side of the political spectrum they lean. To read other sources, click on the plus signs below. Learn more about this data
Left 0% Center 71% Right 29%
Bias Distribution Powered by Ground News

In recent months, some of the largest Chinese-owned solar factories in Vietnam have reduced production and cut their workforce, as these facilities fall under the scope of the newly imposed duties.

QR code for SAN app download

Download the SAN app today to stay up-to-date with Unbiased. Straight Facts™.

Point phone camera here

As part of their response, Beijing-backed solar companies are relocating their operations to nearby countries like Indonesia and Laos. New factories are quickly being constructed in these nations, with their combined production capacity is anticipated to equal around half of the solar panels installed in the U.S. last year.

The U.S. government has implemented these trade measures amid concerns that Chinese solar companies benefit from subsidies provided by the Chinese Communist Party. American officials argue this enable these companies to offer solar products at artificially lower prices, undercutting manufacturers from other countries.

However, Chinese companies had been anticipating potential restrictions on their Vietnamese facilities and had already decreased their operations in the country prior to the tariffs’ introduction. However, those companies worked to get ahead of the announcement by frontloading exports to the U.S. beforehand.

In the lead-up to the new trade regulations, solar shipments from Vietnamese plants to the U.S. saw a significant increase, with shipments up by nearly 74% through August.

Now that the U.S. is working to cut down on Chinese-produced solar imports from Vietnam, solar panel exports from Indonesia and Laos to the U.S. are starting to grow. Indonesia’s solar exports to the U.S. nearly doubled to $246 million, while American solar imports from Laos, which were virtually non-existent last year, have reached a value of approximately $48 million.

Looking ahead, Chinese solar manufacturers are already planning their next move. A recently signed agreement worth almost $1 billion with Saudi Arabia will see Chinese companies establish a new solar plant in the region. Meanwhile, in the U.S., Chinese firms are working to take advantage of renewable energy incentives from the Biden administration, with a stake in about 20% of the American solar facilities announced since the introduction of those subsidies.

Tags: , , , , , , ,

[Jack Aylmer]

CHINESE SOLAR PANEL MANUFACTURERS HAVE DEVELOPED A STRATEGY FOR AVOIDING U.S. TARIFFS.

SIMPLY PACK UP AND MOVE SOMEWHERE ELSE.

SOMETHING THEY’VE DONE REPEATEDLY TO CIRCUMVENT AMERICAN TRADE RESTRICTIONS.

IN VIETNAM, SOME OF THE BIGGEST CHINESE-OWNED SOLAR FACTORIES ARE CUTTING PRODUCTION AND LAYING OFF WORKERS ACCORDING TO NEW REPORTING FROM REUTERS.

LOOKING TO AVOID RECENTLY IMPOSED DUTIES AIMED AT THEM BY THE COMMERCE DEPARTMENT-
WITH RATES THAT GO AS HIGH AS NEARLY 300 PERCENT.

SO INSTEAD, THESE BEIJING BACKED SOLAR FIRMS ARE MOVING TO NEARBY INDONESIA AND LAOS.

QUICKLY BUILDING FACILITIES THAT WILL HAVE ENOUGH COMBINED PRODUCTION CAPACITY TO SUPPLY ABOUT HALF THE PANELS INSTALLED IN THE U.S. LAST YEAR.

ALL OUT OF REACH OF WASHINGTON’S TRADE PROTECTIONS.

THE U.S. GOVERNMENT INSTITUTED THESE TARIFFS BECAUSE IT BELIEVES CHINESE SOLAR COMPANIES ARE ILLEGALLY BENEFITING FROM CCP SUBSIDIES-
MAKING THEIR PRICES ARTIFICIALLY LOW, SO THEY CAN UNDERCUT MANUFACTURERS FROM OTHER NATIONS.

BUT CHINA ANTICIPATED THE U.S. WOULD GO AFTER ITS VIETNAMESE FACTORIES-
ALREADY OPERATING THEM AT A REDUCED CAPACITY WHEN THE NEW TRADE REGULATIONS CAME DOWN.

NOT BEFORE FRONTLOADING EXPORTS FROM THESE FACILITIES TO GET AHEAD OF THE INCOMING TARIFFS-
WITH SOLAR SHIPMENTS TO THE U.S. FROM VIETNAM UP ALMOST 74 PERCENT THROUGH AUGUST.

MEANWHILE, SOLAR EXPORTS FROM INDONESIA TO THE U.S. HAVE NEARLY DOUBLED TO 246 MILLION DOLLARS.
AS SOLAR EXPORTS FROM LAOS TO THE U.S., WHICH WERE NEARLY NON-EXISTENT LAST YEAR, REACHED A VALUE OF AROUND 48 MILLION DOLLARS.

CHINA IS ALREADY MAKING PLANS FOR ITS NEXT MOVE.

REACHING AN ALMOST ONE BILLION DOLLAR DEAL WITH SAUDI ARABIA TO BUILD A NEW SOLAR PLANT THERE-
AND ALSO INCREASING THEIR U.S. PRESENCE IN AN EFFORT TO TAKE ADVANTAGE OF RENEWABLE ENERGY INCENTIVES FROM THE AMERICAN GOVERNMENT.

WITH CHINESE COMPANIES BEING INVOLVED IN ABOUT ONE-FIFTH OF THE SOLAR FACTORIES ANNOUNCED SINCE THE BIDEN ADMINISTRATION ENACTED THOSE SUBSIDIES.

TO GET MORE STORIES ABOUT RENEWABLE ENERGY CONFLICTS BETWEEN THE U.S. AND CHINA, DOWNLOAD THE STRAIGHT ARROW NEWS APP AND SIGN UP FOR ALERTS FROM ME – JACK AYLMER.