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Tariffs of 10% apply to most products from most countries, but energy and energy products, steel, and aluminum are exempt, as tariffs have already been applied. The Trump administration approved tariffs effective April 5, which will apply to most countries at a rate of 10%. The tariffs apply to a wide range of imports, covering most products. The tariffs will be replaced by a higher reciprocal rate of between 11% and 50% for 60 countries starting April 9 and are designed to equalize tariffs and related trade enforcement for 60 countries. The additional tariffs will not apply to energy and energy products or to steel and aluminum, which were recently hit with 25% tariffs in a separate order in February. The United States large and persistent annual trade deficits in goods have led to the hollowing out of our manufacturing base; inhibited our ability to scale advanced domestic manufacturing capacity; undermined critical supply chains; and made our defense industrial base dependent on foreign adversaries, the executive order said. President Trumps executive order adding 25% tariffs on imported steel and aluminum from most global suppliers will increase costs for all types of projects, from small residential solar projects to the largest utility-scale solar plants. SinoLink Securities said aluminum frames were the most expensive solar panel manufacturing component in November 2024, accounting for 14% of total solar panel production costs. In December, the Biden administration doubled tariffs on solar products from China . Section 301 tariffs are 50% for polysilicon, wafers, and solar cells imported from China. The US solar module market saw a 4% increase in December, rising $0.01 per watt to $0.26 per watt. Modules using cells from Cambodia, Malaysia, Thailand, and Vietnam—countries affected by the policy—experienced a 7.7% price increase from November to December. Although prices have declined slightly since then, they remain high, according to a report by Anza. The new round of tariffs on April 5 does not apply to products from Canada and Mexico, which already carry 25% tariffs. The new tariffs will not apply to certain items that Trump has already targeted for current or potential future sectoral tariffs, including steel, aluminum, certain derivative products using steel or aluminum, copper, pharmaceuticals, automobiles and auto parts, semiconductors, certain critical minerals, and energy and energy products, said Keith Martin, a partner at Norton Rose Fulbright. An annex to Trumps order lists specific industry materials that will not be affected by the new round of tariffs. Polysilicon and other relevant materials are exempt from the tariff increase. The full annex list is available here . Imports from countries that will face higher tariffs on April 9 include: The new tariffs are in addition to some existing ones, Martin said. For example, Chinese goods will be subject to 54% tariffs starting April 9: an existing 20% ??tariff that Trump previously imposed plus a new reciprocal rate of 34%. AD/CVD Tariffs “If we want a thriving solar manufacturing sector—one that supports good-paying American jobs, provides energy independence, and ensures resilient supply chains—we need strategic implementation backed by a sustained commitment to investing in American manufacturing,” said Tim Brightbill, partner at Wiley Rein LLP, in an article in pv magazine . The solar industry is also reacting to the tariffs imposed by a new round of antidumping and countervailing duty (AD/CVD) petitions. In its op-ed, Brightbill notes that new U.S. government trade data reveals a dramatic decline in imports of solar cells and modules from the four Southeast Asian countries mentioned in the AD/CVD petition. The value of imports has plummeted: Vietnam : 91.5% less Thailand : 90% less Malaysia : 87% less Cambodia : 66% less These are not minor fluctuations. These numbers make one thing very clear: preliminary tariffs are working, Brightbill said. Carrot and stick? While the tariffs are expected to be a stick to boost American manufacturing, experts warn that the carrot is needed if they are to succeed. When it comes to the solar industry, manufacturing is dominated by China-based producers willing to operate on tight margins. Without some form of protection to level the playing field against the prices they can offer, theres simply no game, said Paula Mints, chief analyst at SPV Market Research, in an article published in pv magazine . Mints said tariffs have historically been effective as tools to protect domestic industries, but not as instruments of economic torture. Mints asserted that incentives like those included in the Inflation Reduction Act (IRA) are a critical element for the successful revival of manufacturing in the United States. Its doubtful the United States could have achieved significant new capacity growth through tariffs alone, Mints said. A highly anticipated policy outcome for the renewable energy sector is the potential reductions in tax credits created by the 2022 IRA, which will be evaluated in the upcoming budget reconciliation process. According to the U.S. Treasury and Rhodium Group, manufacturing investment has boomed, including $114 billion for solar energy, $77 billion for battery manufacturing, and $66 billion for energy storage. Regarding the tariffs, the US economy has retreated significantly in the trading session following the order. The Dow Jones Industrial Average plummeted approximately 3% in response to the change, and the US dollar has fallen in relative value against the euro by between 2% and 3% in the immediate aftermath. |
