How will the increase of Section 201 tariff rate quota to 12.5 GW impact the market?

The PV industry has seen several changes in tariff policies due to the U.S.-China trade war over the past few years, with the Section 201 tariff being a significant protective measure. Since January 23, 2018, the US government has imposed Section 201 tariffs on imported cells and modules to protect local manufacturing and balance supply and demand. As of 2024, the Section 201 tariff rate for cells and modules is 14.25%, with a yearly decrease of 0.25%, set to expire on February 6, 2026. In May 2024, the U.S. removed the tariff exemption for bifacial modules. By the end of July, there was a 5 GW tariff rate quota (TRQ) for cells.

On August 12, the U.S. raised the annual TRQ for cells from 5 GW to 12.5 GW, which is applied to cells imported after August 1, 2024, while imports exceeding the old 5 GW limit before August 1 are subject to the Section 201 tariffs.


 

InfoLink analysis

Despite uncertain policy, the increase in TRQ on cells under Section 201 matches our expectations for the US market. Since the U.S. lacks sufficient local cell capacity and won't have enough local supply soon, it will need to rely on imports. Additionally, module capacity is rising in the U.S., likely to reach 40 GW by the end of 2024 based on InfoLink’s database. This capacity growth will boost cell demand, despite challenges in utilizing the available capacity effectively.

The U.S. has imported nearly 4.5 GW of cells from February to August, reaching 89% of the initial 5 GW quota limit. Overall, the increasing TRQ aligns with the rising market demand.

Notably, this policy adjustment suggests that US authorities recognize the necessity of current cell imports in supporting the domestic PV industry. Despite the ongoing risks of anti-circumvention and AD/CVD on the four Southeast Asian countries (Vietnam, Malaysia, Thailand, and Cambodia), the primary cell sources previously, US module manufacturers still require a stable cell supply to ensure local production. Thus, in the short term, cells from these four Southeast Asian countries may still export to the U.S. under tariffs.

Tariff policy movements are crucial for PV companies targeting the US market since they directly impact product cost structures and competitiveness. Policy details, current tariffs, and market implications are essential for industry players to forecast future market trends.

As the US PV market continues to evolve rapidly with updates for Section 201, anti-circumvention, and AD/CVD on Southeast Asian countries, InfoLink launches the US Market Report: PV Supply Chain Analysis and Market Prospect, which provides an in-depth analysis of these changes and explores various tariff strategies for different input channels. The report includes the latest market data, competitive landscape analysis, and future trend predictions. Whether you are a company looking to enter the US market or a local supplier aiming to strengthen your market position, this report will be an essential tool for strategic decision-making. Master this report to gain comprehensive insights into the US PV industry and seize market opportunities.