US tariffs and Europe's slowdown change global solar panel trade

Trade data revealed that solar panel manufacturers in Laos, Indonesia and Cambodia, which are mostly owned by Chinese companies, increased their market share in the U.S. after tariffs on exports to other Southeast Asian nations, including Cambodia and Thailand were imposed.

After two rounds of tariffs last June and November, the U.S. Government finalised its steep levies against imports of solar modules and cells from Vietnam, Malaysia and Thailand in April. This was to prevent dumping of these products by factories owned mainly by Chinese in these countries.

Reports showed that Chinese companies had moved production to Indonesia and Laos, and increased exports to the United States.

A review of U.S. data on trade shows that the combined share of Indonesia and Laos for the U.S. market of solar modules rose from less than 1% to 29% within three months of the second round U.S. tariffs being imposed in late November. This was up from less than 1% as recently as 2023.

Analysts and experts in the industry say that the Southeast Asian capacities owned and operated by Chinese companies are almost exclusively designed to avoid tariffs and to supply the U.S. market at premium prices compared to the global price, exposing Washington's limited trade interventions.

Yana Hryshko is the head of global research for Wood Mackenzie's solar supply chain. She said that all manufacturing capacity in four Southeast Asian nations hit by high tariffs will now "likely be shut down or dramatically reduced".

TRANSFORMING TRADE ROUTES

In the nine-month period since the first tariff round in June, solar panel exports to the U.S. from Vietnam, Malaysia Thailand and Cambodia fell by 33% annually. The trade data revealed that exports to the U.S. from Indonesia, Laos, and other regional neighbors grew by around eightfold in the same time period.

The total U.S. imports of solar panels have dropped by 26% since the beginning of June. The combined market share of four countries has fallen from 82% for the year 2024, to just 54% after the second tariff round in late November.

The U.S. has tripled its imports of solar panels that can be assembled here in the United States, despite the higher cost of imported products from the countries targeted. Indonesia and Laos, however, still took a large share of the market with their 17-fold increase in exports.

The data revealed that solar cells made up 28% of the total U.S. imports of solar panels since the first tariff round, as opposed to 6.5% by 2023.

Fei Chen is a solar research analyst with Rystad Energy. She said that Chinese manufacturers have already revised their export strategies in response to the tariffs imposed on Indonesia and Laos.

She said that several solar manufacturers are planning to establish production bases outside of Southeast Asia, such as in Turkiye and Oman, Saudi Arabia, the UAE, Ethiopia and Saudi Arabia to supply the U.S.

Data from the energy think tank Ember revealed that factories in China have been increasing solar panel sales into Asia and Africa. They were largely shut out of U.S. markets for more than a decade due to high import duties.

Ember data shows that Asia's share of Chinese exports increased to 37% in the first quarter 2025 from 25.4%, while Europe's share decreased from 41% to 34%.

The total Chinese exports remain stable despite a lower demand in Europe, its largest market.

(source: Reuters)