Trump orders new 15% tariff on key material for solar panels and microchips

Trump Sets 15% Tariff on Imported Polysilicon and Related Products

President Donald Trump signed an executive order on Thursday imposing a 15% tariff on imported polysilicon and certain derivative products, with the measure scheduled to take effect on 4 December. The order also establishes minimum import prices of $21 per kilogram for polysilicon, $100 per kilogram for polysilicon ingots and wafers, $0.22 per watt for solar cells, and $0.38 per watt for solar modules or panels.

The proclamation states that the measures will “help ensure the commercial viability of United States production of polysilicon and its derivatives that is necessary to meet United States economic and national security requirements.” Polysilicon is an ultra-pure form of silicon used in semiconductor manufacturing for artificial intelligence applications, data centers, and solar power equipment.

The United States currently operates two primary polysilicon production facilities. Hemlock Semiconductor runs 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 tariff would encourage continued investment in domestic capacity and support long-term U.S. competitiveness. Wacker stated that it welcomed the administration’s attention to semiconductor supply chain resilience, advanced computing infrastructure, and defense and security interests.

The order further directs the Commerce Department to develop an incentive program for companies investing in new or expanded domestic production of polysilicon and related products. Commerce Secretary Howard Lutnick provided the recommendations adopted in the order.

China’s foreign affairs ministry responded to the tariff by stating that the United States was overstretching the concept of national security and abusing state power to target Chinese businesses. Spokesperson Lin Jian said protectionism would not increase U.S. competitiveness, that the action would disrupt normal trade between Chinese and U.S. firms, and that it was not in the interest of U.S. businesses or consumers. Lin added that China would continue to protect the legitimate rights and interests of its companies.

U.S. solar manufacturers have previously cited Chinese government subsidies and shifts of production to third countries as factors enabling lower-priced imports. The new tariff applies to products made of polysilicon regardless of origin.

China reported that its exports rose 23.9% year-on-year in dollar terms in July, with growth led by shipments of AI-related goods. Sheana Yue, senior Asia economist at Oxford Economics, said the combination of strong electronics and machinery exports with industrial input imports indicated that AI and electrification trends would continue to influence global manufacturing. She noted that China’s position in AI hardware, electric vehicles, batteries, and other high-value manufacturing could support further gains in export market share even amid softer overall demand.