The United States is preparing to impose a 15% tariff and a series of minimum import prices on polysilicon and its derivative products, a move designed to push solar panel manufacturers toward domestic raw materials. The proposal, which follows a national security investigation launched in July 2025 under Section 232 of the Trade Expansion Act of 1962, has drawn immediate opposition from Beijing.
Since 2012, Washington has used anti-dumping investigations, tariffs, and tax incentives to steer Chinese solar panel makers away from China and eventually onto American soil. The new tariffs add a final piece to that strategy, aiming to force these companies to use local raw materials and build a complete solar supply chain inside the US.
Some Chinese commentators have described the policy shift as a “pig-butchering scam,” arguing that the Biden administration used tax credits to lure Chinese solar makers into building US factories, only for the Trump administration to slash those credits and effectively seize their investment. The unveiling of the new tariffs coincided with China’s move to tighten its exit-entry regulations, a shift some commentators mistakenly read as a sign of national closure. In fact, Beijing appears more focused on controlling its highly skilled engineers, including those with know-how in N-type solar cell technology, and preventing them from quietly joining American rivals.
Details of the Tariff Plan
Citing unnamed sources, Reuters reported that President Donald Trump will include minimum import prices on polysilicon, wafers, cells, modules, and solar panels, along with a 15% tariff on the polysilicon derivatives. The Chinese embassy in Washington said the US must stop the Section 232 tariff measures as soon as possible and resolve the concerns of all parties through equal dialogue.
“China firmly opposes the US overstretching the concept of national security and abusing state power to unjustifiably suppress Chinese companies,” an embassy spokesperson said. “Protectionism will not enhance US competitiveness.” The spokesperson added that the US actions “seriously impede normal economic and trade exchanges between Chinese and American companies and serve the interests of no party, including American businesses and consumers.”
The Global Times, a unit of the People’s Daily, also criticized the tariff plan, citing Chinese industry experts. Huo Jianguo, vice chairperson of the China Society for World Trade Organization Studies in Beijing, told the newspaper that the Trump administration has overstretched the concept of national security. He said Washington should avoid rash protectionist moves that serve no one’s interests, disrupt global supply chains, and fail to boost US competitiveness.
Lu Jinbiao, an industry expert with the China Photovoltaic Industry Association’s expert committee, said the plan would do little to boost US polysilicon output but would raise costs for American solar manufacturers. He noted that the impact on Chinese producers would be limited, since their main export markets are India, Vietnam, and other Southeast Asian countries.
Shifting Dynamics in the Solar Sector
However, many Chinese commentators acknowledge that shifts in US policy over the past decade have started shaking China’s dominant position in the global solar panel sector. “Since last year, Chinese solar panel makers including Trina Solar, JinkoSolar, and Boviet Solar have been unwinding newly built US plants. But some were put up for sale within a week of starting production,” says a Shaanxi-based columnist writing under the pen name Clear Mind. “The production lines and equipment are still there, but there’s no profit on the books, so Chinese firms end up exiting at low prices.”
“The root cause lies in tax credits,” he writes. “According to previous US policies, solar manufacturing built on American soil could enjoy tax credits covering cells, modules, and other key segments, and a large module plant could save hundreds of millions of dollars a year, enough to offset high local production costs.” He says a new federal law took effect in early July, sharply speeding up the tax credit phase-down and tightening eligibility for foreign-invested firms. The legislation forced most leading Chinese firms to sell out entirely or keep only a minority stake, with little chance of recovering their upfront investment.
The US policy change refers to the One Big Beautiful Bill Act, signed into law on July 4, 2025. Under the law, solar panel makers had to have formally begun building their factories in the US before that date, July 4, 2026, to lock in the federal tax credit. Afterward, they have a four-year grace period to complete construction. The law sets rising domestic-content thresholds for solar components: modules sold in the US must be 50% domestically sourced in 2026, rising to 60% in 2027, 70% in 2028, and 80% in 2029. Inverters face a similar schedule, starting at 50% in 2026 and increasing five percentage points a year to reach 65% by 2029.
The law also bars tax credits for any US taxpaying entity, such as a solar plant project company or an equipment manufacturer, that qualifies as a prohibited foreign entity (PFE). A US project company falls onto that restricted list if a government, citizen, or permanent establishment of China, Russia, Iran, or North Korea, or a US-sanctioned company, holds 25% or more of its equity, directly or indirectly.
Chinese manufacturers are now advised to look closely at the long-term impact of foreign policy and government support, while keeping their production lines and market plans flexible enough to adapt if that support changes. The broader implications for the global solar trade are significant, as the US moves to reshape its supply chain amid ongoing tensions with China. For more on how tariffs are affecting Asian economies, see this analysis of regional strain and the reshaping of US-China ties.
