US tariffs, Europe slowdown reshape global solar panels trade

By Sudarshan Varadhan

Solar panel makers in Laos and Indonesia, mostly owned by Chinese firms, boosted their share in the U.S. market after steep tariffs hit exports from other Southeast Asian countries including Cambodia and Thailand, trade data showed.

The U.S. government finalised steep levies on imports of solar cells and modules from Vietnam, Malaysia, Thailand and Cambodia in April, following two rounds of tariffs in June and November last year, to prevent dumping by mostly Chinese-owned factories in these countries.

However, Chinese companies have moved their production to Indonesia and Laos and boosted exports to the United States, Reuters reporting showed.

The combined share for Indonesia and Laos in the U.S. solar modules market rose to 29% in the three months after the second round of U.S. duties were imposed on neighbouring producers in late November, from less than 1% in 2023, a Reuters review of U.S. trade data showed.

Analysts and industry experts say the southeast Asian capacities owned by Chinese companies were almost exclusively set up to sidestep tariffs and supply the U.S. markets at premiums to global prices, exposing the limits of Washington's trade interventions.

Yana Hryshko, head of global solar supply chain research at consultancy Wood Mackenzie, said all solar manufacturing capacity in the four Southeast Asian countries hit with high tariffs would now likely "be shut down or reduced dramatically".

CHANGING TRADE ROUTES

Solar panel exports from Vietnam, Malaysia, Thailand and Cambodia to the U.S. fell by 33% on an annual basis in the nine months since the first round of tariffs in June. In the same period, exports from regional neighbours Indonesia and Laos grew around eight-fold, the trade data showed.

Overall U.S. solar panel imports have fallen 26% since June, with the four countries' combined share of the market plunging

from 82% in the full year 2024 to 54% in the three months following the second round of tariffs in late November.

U.S. imports of solar cells, which can be assembled in the United States to create panels, have tripled since the first round of tariffs despite higher costs of imports from the targeted countries. However, Indonesia and Laos still ate into the market as their exports surged about 17-fold.

Solar cells accounted for roughly 28% of all U.S. solar imports since the first round of tariffs, compared with 6.5% in 2023, the data showed.

Chinese manufacturers are already revising export strategies due to concerns about tariffs on Indonesia and Laos, said Fei Chen, solar research analyst at consultancy Rystad Energy.

"Several solar manufacturers plan to set up production bases in non-Southeast Asia regions such as Turkiye, Oman, Saudi Arabia, UAE, Ethiopia, to supply the U.S. market," she said.

Factories in China, mostly shut out of the U.S. market for over a decade by high import duties, have been boosting solar panel sales to Asia and Africa, data from energy think-tank Ember showed.

Asia accounted for 37% of all Chinese exports in the first quarter of 2025, up from 25.4% in 2024, while Europe's share declined to 34% from 41% in 2024, Ember data showed.

Total Chinese exports have remained steady despite lower demand due to high stockpiles in Europe - its biggest market.