The United States levies high tariffs on solar products from four Southeast Asian countries, aimed at cracking down on Chinese companies circumventing country of origin rules.

Taiwan • Business • 04/22 05:59
The United States levies high tariffs on solar products from four Southeast Asian countries, aimed at cracking down on Chinese companies circumventing country of origin rules.

On April 21, 2025, the U.S. Department of Commerce announced the imposition of anti-dumping and anti-subsidy duties of up to 3,521% on solar products from Cambodia, Malaysia, Thailand, and Vietnam. This action was taken due to allegations that Chinese companies were setting up factories in Southeast Asia to falsify the origin of their products to evade tariffs. This measure is pending a final determination by the U.S. International Trade Commission by June 2. The Vietnamese government has also tightened its regulations on product origin to prevent illegal transshipment, in response to U.S. concerns.

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04/22 05:59

The United States levies high tariffs on solar products from four Southeast Asian countries, aimed at cracking down on Chinese companies circumventing country of origin rules.

On April 21, 2025, the U.S. Department of Commerce announced the imposition of anti-dumping and anti-subsidy duties of up to 3,521% on solar products from Cambodia, Malaysia, Thailand, and Vietnam. This action was taken due to allegations that Chinese companies were setting up factories in Southeast Asia to falsify the origin of their products to evade tariffs. This measure is pending a final determination by the U.S. International Trade Commission by June 2. The Vietnamese government has also tightened its regulations on product origin to prevent illegal transshipment, in response to U.S. concerns.

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Background and Content of U.S. Tariff Measures

In 2024, the U.S. Department of Commerce launched an investigation into solar products from four Southeast Asian countries. This was prompted by a complaint filed in April of the same year by the American Solar Manufacturers Against Chinese Circumvention, accusing large Chinese solar panel manufacturers of setting up factories in Southeast Asia to export products to the U.S. at below production cost and with unfair subsidies, causing substantial harm to domestic industries.

According to the final ruling announced on April 21, 2025, the U.S. Department of Commerce determined that although these products were labeled as made in Southeast Asia, they were mostly produced by factories owned and operated by Chinese companies, with only minor processing done before changing the country of origin label, constituting so-called "circumvention of origin." As a result, the U.S. decided to impose anti-dumping (AD) and countervailing duties (CVD) on the involved products, with rates varying by company and country, generally higher than the preliminary rates announced at the end of 2024.

Below are examples of final tax rates for some companies and countries:

  • Cambodia: Due to most companies not cooperating with the investigation, Chinese-funded companies such as Hounen Solar, Solar Long, and Jintek Photovoltaic were subjected to a combined tax rate of 3,521.14%; other operators faced rates of about 651.85%.
  • Vietnam: Most companies faced rates between 120% and 300%, with GEP New Energy and HT Solar having rates of 813.92%; unnamed companies faced a maximum rate of 395.9%.
  • Thailand: Trina Solar had a rate of 375.19%; companies like Taihua New Energy faced rates as high as 972.23%.
  • Malaysia: Hanwha Q Cells had a rate of 14.64%; JinkoSolar had a rate of 40.30%, while Baojia New Energy faced a rate as high as 250.04%.

Additionally, the U.S. Department of Commerce explicitly stated that solar cells and modules would be considered "like products," meaning even unassembled cells could not avoid taxation through product classification.

Investigation and Implementation Procedures

The tariff measures still require the U.S. International Trade Commission (ITC) to complete a final "injury determination" by June 2, 2025. If the ITC determines that these imported products cause substantial harm to the U.S. solar industry, the tariffs approved by the Department of Commerce will officially take effect. Based on the current preliminary ruling, the ITC has already found that the U.S. industry has indeed been harmed, making the final approval highly likely.

According to Bloomberg New Energy Finance (BNEF) data, in 2023, the U.S. imported solar equipment worth $12.9 billion from these four countries, accounting for 77% of total U.S. solar imports. This level of dependency makes the U.S. particularly concerned about "circumvention of origin."

Vietnam Strengthens Origin Regulation to Address Trade Pressure

Facing U.S. tariff pressure and trade fraud accusations, the Vietnamese government issued a new directive on April 15, 2025, through the Ministry of Industry and Trade to strengthen the regulation of the origin of imported goods. The directive clearly states that with the U.S. increasing tariffs, the risk of trade fraud rises, and Vietnam must prevent becoming an illegal transshipment hub for Chinese goods.

Specific measures include:

  • Strengthening the supervision and inspection of imported raw materials to ensure consistency between their final manufacturing location and origin labeling.
  • Implementing stricter "Made in Vietnam" label issuance procedures, especially for companies with a sudden surge in origin certificate applications.
  • Requiring customs and related departments to enhance on-site factory inspections to prevent minor processing followed by relabeling for export.
  • Instructing officials to propose specific measures to prevent illegal transshipment when necessary.

Nearly 40% of Vietnam's imports come from China, while the U.S. is its largest export market. The U.S. has repeatedly accused China of using Vietnam as a transshipment center to evade high tariffs on Chinese goods. This move by Vietnam reflects its effort to maintain stable exports to the U.S. while avoiding entanglement in larger trade conflicts.

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