Impact of US trade barriers on solar PV supply chain: challenges and outlook

On April 2, 2025 (US Eastern Time), the White House issued Executive Order No. 14257, invoking the International Emergency Economic Powers Act (IEEPA) and its relevant laws to impose tariffs on most countries worldwide. A 10% baseline tariff was scheduled to take effect on April 5, followed by higher reciprocal tariffs targeting countries with significant trade deficits with the U.S. starting April 9.

However, on April 9 (US Eastern Time), President Trump announced that, except for China, the higher reciprocal tariffs on other countries would be suspended for 90 days. During this period, the 10% baseline tariff will remain in effect. As of the time of writing, no official executive order has been issued regarding this announcement, and future reciprocal tariffs after the 90-day suspension remain uncertain. Therefore, this InfoLink analysis is based on the initially announced reciprocal tariffs to assess potential impacts.

This analysis sheds light on major solar manufacturing countries, referencing the initial reciprocal tariff rates, and incorporates an overview of the current trade barriers such as AD/CVD investigations. The following points are noteworthy:

1. Polysilicon and solar-grade wafers are exempt from both the baseline and reciprocal tariffs. The tariff table below applies only to solar cells and modules exported to the U.S.

2. Both the analysis and the table below assume that the country of origin for modules is determined by the origin of the cells used. For example, modules made with Indonesian cells but assembled in and exported from Vietnam would be considered Indonesian in origin, and thus the reciprocal tariff rate for Indonesia would apply. However, the final determination is subject to the US Customs and Border Protection (CBP).
    

U.S.-bound tariff rates on solar cells and modules from major manufacturing countries (based on the initial reciprocal tariffs)

In terms of tariff rates alone, Turkey, Indonesia, and India seem to have the most favorable conditions for exporting cells and modules to the U.S., offering a cost-performance advantage. However, actual exports still depend on cell production capacity. India and Turkey have limited cell capacity, often not enough even for their own module needs, and the U.S. also faces a shortage of cells. Given trade barriers, the U.S. will likely still rely on imports from countries like Indonesia and Laos, which have more complete cell production. Among them, Indonesian products are the most competitive after a comprehensive evaluation.

Even after adding tariffs, Chinese products may still be cost-competitive in the US market. However, since AD/CVD investigations can apply retroactively, if a company exports large volumes when tariffs are low, exporters may be classified as part of the China-Wide Entity and face a high 238.95% AD rate. To avoid this risk, Chinese solar manufacturers have mostly stopped direct exports to the U.S. in recent years. Therefore, even with Trump's new tariff hikes targeting China, the impact on Chinese PV companies remains limited.
 

PV supply chain and market outlook

In summary, insufficient cell production capacity is a critical issue in the US PV market. In 1Q25, US module capacity stood at 50.5 GW; in contrast, US cell capacity amounted to only 2.3 GW. Excluding thin-film module capacity, the U.S. faces a cell capacity gap of approximately 37 GW, necessitating imports from Indonesia and Laos. If these two countries cannot fully meet demand, some imports may still need to come from India or Malaysia, which face AD/CVD tariffs. Overall, higher tariffs will certainly raise the cost of US solar projects, and supply chain prices will also need to increase to address the added pressure.

As various countries are actively engaging in trade negotiations with the U.S. over tariffs, the risk of high tariffs may lead solar manufacturers to shift production to regions like the Middle East or Africa, where tariffs are lower, and capacity is still growing. Eventually, building diverse markets and strong brand value will be key to staying competitive.
 

InfoLink keeps tracking the impacts of U.S. tariffs and offers the following services:

• Updates on the supply chain construction plans and progress within the U.S.

• Breaking news analysis of US policy changes and updates

• Insights to seeking alternative markets: Global PV market insights to explore new markets

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