China Solar Firms Hope For a Quick Resolution Of US Tariff Tussle

As global markets swoon over the US tariff action, and China’s surprising retaliatory response with a 34 percent tariff on US imports to that country, China’s solar titans hope that better sense will prevail in due course, sooner rather than later. With stock prices for both Jinko (NYSE listed) and Longi (Shanghai SSE listed) down almost 10% today, the markets are clearly more worried than the firms admit. In contrast, shares of US based First Solar were down ‘only’ 5.5%, as the firm is expected to benefit from the new tariffs on imports.

The point being that for all the bluster, Trump’s actions are in essence focused on China, as the largest trading partner of the US with the biggest deficit to cut.

The retaliatory measures from China will likely have queered the pitch for those expecting Trump’s tariffs to be a self goal that would create its own pressure for negotiations as price hikes bite US customers. While the 10 percent “minimum base tariff” on all trade partners came  into effect on April 5, a further 34 percent tariff on China, 32 percent on Indonesia, 36 percent on Thailand, 46 percent on Vietnam and 49 percent on Cambodia will be effective from April 9. These are the ones that are likely to hurt Chinese majors, as almost all had outsourced their supply chains for exports to the US and other markets to South East Asia in the past few years.  Domestic capacity has been serving domestic markets, besides ‘friendly’ regions like Latam, the Middle East etc,

Post the IRA act in 2022-23, the top Chinese firms had all firmed up plans to make in the US with their own plants, with dedicated supply chains that avoid the risk of sourcing polysilicon from Xinjiang for instance. A lot of those plans have progressed significantly. the impact of the current tussle on those plans is yet to play out.

Now, with the import tariffs on all materials, prices in the US are likely to rise as the US is nowhere close to self sufficiency in cell, wafer or polysilicon manufacturing. Despite the almost 50 GW of solar capacity added in 2024, the market post 2025 has just become a lot more cloudy for solar firms due to the tariffs, as many fear announced and approved plans could also face reappraisal in the new pricing environment.

Indian manufacturers and exporters face the same issue, as, despite rising domestic capacity, beyond modules, it is nowhere close to meeting even domestic needs even, making it tough to take full advantage of the slightly better hand of 26% tariffs that have been dealt to India. Turkey is seen as the one clear beneficiary if at all this prolongs, with the lowest tariffs in place for now if just 10% over the baseline tariffs.