As President-elect Trump prepares to take office for a second term, his presidency will undoubtedly reshape US international trade policy, impacting US and foreign manufacturing. We can expect that his administration will implement new and increased tariffs. Whether those tariffs come in the form of universal tariffs, tariffs targeted to a few countries, industries or products, or tariffs targeted to certain companies will likely be known once Trump assumes office. The solar industry, particularly solar products originating from China, is expected to be a focus point of potential future tariff measures.
In addition to potential tariff increases, the solar industry is likely to continue to be a high priority sector for forced labor enforcement under the Uyghur Forced Labor Prevention Act (UFLPA) by US Customs and Border Protection (CBP), particularly due to the significant use of polysilicon, a key raw material in solar panels, which is often sourced from Xinjiang, a region in China where forced labor concerns is prevalent.
How Tariffs Could Impact the Solar Industry
As President-elect Trump prepares to take office, the specific tariff actions he may pursue remain uncertain. Historically, tariff increases have followed extensive investigations by US government agencies under statutory authorities like Section 301 and Section 232. However, it is plausible that Trump could leverage alternative powers, such as the International Emergency Economic Powers Act (IEEPA), to swiftly enhance protections for domestic solar manufacturers. This could involve the rapid imposition of targeted tariffs on imports of solar panels and components.
These targeted tariffs could take various forms. For instance, they might focus solely on imports from China or extend to other regions with growing photovoltaic (PV) panel production, such as Vietnam, Malaysia, and Thailand. As developments unfold, we will continue to monitor and provide updates on potential impacts to the solar industry.
Solar Imports Will Continue to Be an Enforcement Priority for CBP
Silica-based products, particularly polysilicon, continue to be classified as “High Priority” sectors for forced labor enforcement by CBP. Indeed, an analysis of CBP’s enforcement data from FY 2023 and FY 2024 reveals that solar goods and components have been a significant target of enforcement actions.
The incoming Trump Administration’s stringent stance on Chinese imports, combined with US Congress’s proactive oversight of UFLPA enforcement, is expected to sustain the momentum of forced labor enforcement within the solar industry. Companies in the solar industry, therefore, should consider conducting regular due diligence of their supply chains to ensure compliance with the UFLPA and other forced labor laws.
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