Impact Of The Latest Tariff Policies Of China And The United States On The Photovoltaic Industry In 2025

The impact of the latest tariff policies of China and the United States on the photovoltaic industry presents a multi-dimensional and deep-level structural adjustment, which not only brings short-term pain, but also promotes the industry to accelerate the transformation to technological upgrading and global layout.

According to the phased agreement reached in May 2025, the United States suspends the 24% "reciprocal tariff" on China and cancels the 125% superimposed tariff, retains the 10% base tariff, and provides a 90-day buffer period for Chinese photovoltaic products. Although this adjustment has eased the pressure of direct exports, Chinese photovoltaic products

Export To The United States Still Face Three Barriers:

High tax rates are superimposed: Chinese mainland components exported to the United States are subject to 201 tariffs (14.25%), 301 tariffs (50%), anti-dumping and countervailing duties (about 45%) and a new 10% base tariff, with a total tax rate of about 109.72%, making direct exports to the United States almost unfeasible.

Limited production capacity in Southeast Asia: The final ruling of the US anti-dumping and countervailing duties on four Southeast Asian countries (Vietnam, Thailand, Malaysia, and Cambodia) will take effect on June 2, 2025. The tax rate of some Cambodian companies is as high as 3521%, and the tax rate of Chinese-funded companies in Vietnam and Thailand generally exceeds 200%. Only Hanwha Q CELLS in Malaysia bears a low tax rate of 14.64% for cooperating with the investigation. This forces Chinese companies to accelerate the transfer of Southeast Asian production capacity to countries such as Indonesia, Laos, Oman, and Saudi Arabia that are not included in the tariff list.

Market demand fluctuations: After the tariff adjustment, the cost of importing US components has decreased, stimulating installation demand in the short term. However, the rapid expansion of domestic production capacity in the United States driven by the IRA Act (capacity exceeded 31GW in the first quarter of 2025) may reduce dependence on imports in the long run.

(1) Supply chain reconstruction: capacity migration from Southeast Asia to the Middle East and Latin America

Capacity contraction in Southeast Asia: LONGi Green Energy's factory in Vietnam temporarily stopped production due to excessively high tax rates, JinkoSolar moved its 3GW module production line in Vietnam to Saudi Arabia, and Trina Solar's 5GW base in Laos started production ahead of schedule. Chinese companies' capacity layout in Southeast Asia has shifted from module exports to cell exports, using the low value share of the battery link to maintain some competitiveness.

Rise of Middle East capacity: The Middle East has become a new capacity center with low tariffs (such as Saudi Arabia and Oman maintaining a 10% base tax rate) and policy support. LONGi is building a 10GW photovoltaic industrial park in the UAE, JinkoSolar is cooperating with Saudi PIF to build a 10GW battery and module project, and TCL is deploying 20GW silicon wafer capacity in Saudi Arabia. In the first quarter of 2025, China's photovoltaic exports to the Middle East surged 230% year-on-year, with Saudi Arabia and the UAE among the top three emerging markets.

Latin American market deepening: Brazil's cumulative installed capacity exceeded 55GW in the first quarter of 2025, with distributed power accounting for 68%. Sanjing Electric launched a full-scenario solution in Brazil, sjef Solar built high-efficiency battery production capacity in Mexico, and Chint New Energy cooperated with local companies to expand the market.

(2) Technological breakthrough: using efficiency advantages to hedge tariff costs

BC battery and HJT technology breakthrough: Longi's BC battery mass production efficiency reached 26.6%, and Aiko reduced costs through the TOPCon passivation contact process to promote the application of BC components in the distributed market. Due to high labor costs, the US market prefers high-power components. The power generation of HJT components is 5% higher than that of TOPCon, becoming the focus of Chinese companies' equipment exports.

Perovskite technology reserves: The Yunnan Normal University team has made progress in the field of all-inorganic perovskite batteries. Chinese companies have deployed perovskite-crystalline silicon stacked battery pilot lines in the Middle East, with a target efficiency of over 28%.

(3) Compliance innovation: responding to supply chain audits and carbon tariffs

Digital tracking of origin: Chinese companies in Cambodia use blockchain technology to generate "digital passports of origin" to prove that the raw materials do not use Chinese silicon materials, in order to circumvent European and American supply chain audits.

Carbon footprint management: The EU carbon tariff (CBAM) will be implemented in 2026. Chinese companies are building zero-carbon factories in the Middle East (such as Trina Solar's Spanish zero-carbon photovoltaic park) to reduce component carbon emissions through green electricity production to meet EU requirements.

Domestic capacity expansion and supply chain faults: The US photovoltaic installation demand is strong (estimated to be 60GW in 2025), but the local silicon wafer production capacity is zero, and the self-sufficiency rate of solar cells is only 20%, and raw materials from China are still needed. Driven by the IRA Act, the domestic component production capacity in the United States has grown rapidly, but the supporting silicon materials and silicon wafer links have progressed slowly, forming a structural contradiction of "overcapacity of components and upstream dependence on imports".

Rising costs conflict with installation targets: US component prices are as high as $0.24/W (3 times the price in China), and the cost of power station construction has soared by 40% after tariffs, directly dragging down the Biden administration's 2035 carbon neutrality goal. Some projects were forced to postpone due to high costs, and the new installed capacity of US PV in the first quarter of 2025 fell by 12% year-on-year.

European market balance: The EU passed the "Net Zero Industrial Act" requiring that the proportion of local photovoltaic component production capacity in 2030 exceed 40%, but the technology relies on Chinese equipment (such as Maxsun's HJT full line market share of 70%-80%). Chinese companies' localized production in Hungary and Germany (such as Longi's German factory) further consolidates market share.

The rise of emerging markets: Africa is expected to have 23GW of new installed capacity from 2025 to 2028. Egypt and South Africa have accelerated the implementation of projects through direct government negotiation, and the proportion of energy storage matching has increased from 4% to 20%. India promotes distributed PV through the PM-SuryaGhar plan, with the goal of adding 40GW by 2026, but strengthening localized manufacturing requirements.

Technology differentiation competition: BC batteries, HJT, perovskite and other technologies will become the core of Chinese companies to break through trade barriers. For example, Tongwei Co., Ltd. HJT battery efficiency reaches 26.5%, which can offset 40% of tariff costs.

Regionalized supply chain network: Chinese companies build a dual circulation system of "Chinese technology + overseas manufacturing", forming regional production capacity centers in the Middle East, Latin America and Africa, and reducing dependence on a single market.

Policy uncertainty: The 2025 US election may lead to policy reversals. If the Republicans come to power, they may restart high tariffs; the EU carbon tariff details are still uncertain, and Chinese companies need to continue to optimize carbon footprint management.