USTR has announced a 50% tariff rate on polysilicon and silicon wafers imported from China under Section 301
This will encourage diversification away from Chinese sources and complement recent domestic investments, it said
Tariffs were found necessary by the agency to allow domestic producers to compete against China’s excess capacity
The Office of the United States Trade Representative (USTR) has raised the Section 301 tariffs on polysilicon imported from China to 50%, while adding silicon wafers to the list of products, slapping a 50% tariff on these as well.
These tariff rates will be applicable to products that are entered for consumption, or withdrawn from the warehouse for consumption, on or after January 1, 2025, reads the federal notice.
According to this notice, increasing tariffs on polysilicon and wafers will complement recent investments, encourage diversification away from Chinese sources, provide additional leverage with China to eliminate the investigated acts, policies, and practices, and reduce vulnerability to those harmful acts, policies, and practices.
The agency admits that increasing tariffs may result in higher prices initially, but adds that the tariffs are necessary to allow domestic producers to compete against China’s massive excess capacity, defend recent investments, and encourage more domestic manufacturing.
“The tariff increases announced today will further blunt the harmful policies and practices by the People’s Republic of China,” said Ambassador Katherine Tai. “These actions will complement the domestic investments made under the Biden-Harris Administration to promote a clean energy economy, while increasing the resilience of critical supply chains.”
This follows the USTR’s May 2024 recommendation to increase the tariff rate on semiconductors, comprising polysilicon, to 50% in 2025, in its 4-year review report to the government. Chinese solar cells are already subjected to 50% tariffs. Later, the USTR proposed increasing tariffs on polysilicon and wafers to 50% in 2025 while excluding solar wafers and cell manufacturing equipment from its ambit (see USTR Announces Final Modifications To Section 301 Tariffs).
The Solar Energy Manufacturers for America (SEMA) Coalition has welcomed the USTR ruling. The coalition’s Executive Director Mike Carr called it a step in the right direction as he hoped it would act as a precedent that a 50% tariff will ‘soon cover the whole solar module supply chain in China.’
Carr added, “But we must go a step further to expand this approach and address the significant trade distortion that exists outside of China from Chinese-owned solar companies to fundamentally help put U.S. workers on a more level playing field.”
The US currently has 34 GW of operational polysilicon manufacturing capacity, and none for wafers and ingots, according to the latest US Solar Market Insight report (see US Solar Module Manufacturing Capacity Exceeds 40 GW).