A trade route spanning three continents and stretching for 20,000 miles (about 32,000 kilometers) has been transporting Chinese solar products into the US market over the past few months.
On August 15th local time, Bloomberg reported a chain of actions taken by the global solar industry in an attempt to ‘evade’ U.S. tariffs.
On August 6th, U.S. President Donald Trump signed an executive order under Section 232 of the Trade Expansion Act of 1962, imposing minimum import prices and additional tariffs on imported polysilicon and its derivatives.
The announcement stipulates that the minimum import prices are as follows: 21 dollars per kilogram for polycrystalline silicon, 100 dollars per kilogram for polycrystalline silicon ingots and wafers, 0.22 dollars per watt for solar cells, and 0.38 dollars per watt for solar modules. A 15% ad valorem tariff will be imposed on these products. The relevant measures will take effect on December 4, 2026.
The announcement also authorized the Ministry of Commerce to establish an incentive program for “returning to the United States”. Enterprises that promise to start construction of polysilicon, silicon ingots, wafers, or solar cell production facilities in the United States by January 20, 2029, can apply for exemption from tariffs on certain imported equipment.
A spokesman for the Chinese Embassy in the US stated in response on that day that China firmly opposes the US tendency to generalize the concept of national security and the misuse of state power to unjustly suppress Chinese enterprises. China will continue to firmly safeguard the legitimate rights and interests of Chinese enterprises.
Bloomberg reported that in recent years, as U.S. officials have tried to combat what they claim are unfair trade practices by China, solar companies have continuously shifted their production to new countries – from Vietnam to Indonesia. Washington has followed with new tariffs, and companies continue to seek new locations, always taking the lead.
Trump's extensive trade measures this time are intended to end this "rat-batting" game.
A detailed report revealed an anonymous supply chain that evaded customs duties:
China exports silicon wafers to new battery factory facilities in Africa (Kenya, Nigeria).
African factories process silicon wafers into solar cells, which are then shipped to assemblers in Batam, Indonesia.
Indonesian assemblers export finished battery panels to the United States after completing their work.
This route was completed within less than a year, quickly supporting a trade volume of over $100 million per month.
This operational space comes from a regulation by the U.S. Customs Service: the origin of solar panels is determined by the “solar cells,” rather than the final assembly location. Solar cells account for 50% to 60% of the cost of solar panels, but they are relatively lightweight, making long-distance transportation more economical. Since January this year, assembly companies in Batam, Indonesia have increasingly purchased solar cells from Kenya and Nigeria, as well as other components from China. By June, imports of solar panels declared to originate from these African countries in the United States amounted to nearly $100 million per month.
Bloomberg stated that the initial signs of “tax avoidance” appeared in March this year—one month after the initial tariffs imposed by the United States on solar products imported from Indonesia took effect. U.S. customs data showed a significant decline in the import of solar panels from Indonesia, but Indonesian export data indicated that exports to the United States did not collapse. This statistical discrepancy suggests that some goods shipped from Indonesia were not recorded as Indonesian products when entering the United States.
Indonesia explained that these differences in export and import statistics cannot be used as a basis for concluding any false statements regarding the country of origin of goods.
According to reports, the new tariff measures provide a window of several months during which companies can continue to ship goods. U.S. regulatory authorities said they will closely monitor any attempts to stock up on goods in large quantities before the measures take effect.
Analysts point out that even if the United States tries to block so-called loopholes, the motivation for Chinese companies to go global remains strong. Data shows that China’s production of photovoltaic components has accounted for over 80% of the global total for many years; currently, China accounts for approximately 80% of the world’s solar manufacturing capacity.
According to Yang Muyi, an analyst at the clean energy think tank Ember, Chinese companies' expansion overseas is not a short-term initiative. 'More and more companies are seeking future markets and aiming to establish long-term presence there.' As market barriers in the United States increase, some solar panel products that were originally planned for the US market may be shifted to emerging markets such as Latin America, the Middle East, and Asia-Pacific.
