Trump Unveils China Trade Actions on Solar, Chips

U.S. Sets Minimum Import Prices and Tariff on Polysilicon Products

The White House issued a proclamation establishing minimum import prices and a 15 percent tariff on certain polysilicon products used in semiconductors and solar panels. The measures, issued under Section 232 of the Trade Expansion Act of 1962, apply to material that is produced primarily in China and took effect December 4.

The order states that the actions are intended to support domestic production of polysilicon and its derivatives to meet U.S. economic and national security requirements. Polysilicon is an ultra-pure form of silicon that serves as the starting material for both semiconductor wafers and solar cells. Manufacturers convert the material into wafers, then into cells and finished panels.

Two U.S. facilities currently produce polysilicon. Hemlock Semiconductor operates a plant in Michigan as a joint venture involving Corning and Japan’s Shin-Etsu Handotai. Wacker Chemie operates a facility in Tennessee. A Corning spokesperson said the decision supports continued investment in U.S. capacity. Wacker stated it was reviewing the measures to assess their impact on semiconductor supply chains and defense interests.

Domestic semiconductor manufacturing relies in part on the larger volume of polysilicon purchased by the solar industry. The Semiconductor Industry Association reports that chips account for 2.4 percent of global polysilicon demand. U.S. solar manufacturing capacity has grown following tax incentives enacted in 2022, though most expansion has occurred in panel assembly rather than in wafer and cell production, which require longer lead times for new facilities.

Several companies with U.S. solar operations, including T1 Energy, First Solar, and Qcells, issued statements supporting the trade actions. T1 Energy, which operates a panel plant in Texas and is investing $510 million in a cell factory, described the measures as supportive of domestic supply chains. The Commerce Department is authorized to establish an incentive program for additional domestic investment in polysilicon and derivative manufacturing.

The minimum prices set by the proclamation are $21 per kilogram for polysilicon, $100 per kilogram for ingots and wafers, $0.22 per watt for solar cells, and $0.38 per watt for solar modules. Trade attorney Tim Brightbill noted that the December 4 implementation date could allow a temporary increase in imports before the new requirements apply. Companies that purchase solar panels have stated that the transition period is necessary to renegotiate supply contracts at the higher price levels.

The hybrid approach combining minimum prices with a tariff was first reported by Reuters. The proclamation does not alter existing tariff rates on finished solar products beyond the new floor prices.

Industry observers have stated that the higher minimum prices are expected to increase costs for solar project developers and, in some cases, for purchasers of semiconductor-containing goods. The extent of any pass-through to final consumers will depend on contract structures and the availability of alternative supply sources.