US media: Solar tariffs harm oneself and allies

Bloomberg article on August 7th, original title: Solar tariffs will harm US allies, not China

All the reasons for implementing trade restrictions in the United States in 2026 are cloaked in a paranoid coat of industrial policy towards China. However, if there is any way to further consolidate China's position in the high-tech supply chain, it is to succumb to this protectionist impulse and continue to implement similar "paranoid policies".

The United States recently announced the imposition of additional tariffs and minimum import prices on imported polycrystalline silicon and related solar equipment. The side supporting these proposed measures has portrayed this game as a 'life and death battle', claiming that China is rising strongly. The trade protectionism lobbying group claims that the current landscape of the solar energy industry allows "a hostile country" to hold the "key to our energy future".

But this logic has a fatal flaw. Since 2022, the United States has basically stopped importing polysilicon directly from China. For trade that no longer exists, tariffs will not have any substantial impact. On the contrary, it will be German and South Korean companies, as well as domestic American companies, that will truly suffer losses - the United States needs a sustained and stable supply of solar raw materials to sustain its own photovoltaic module industry.

It can be said that almost no industry can better reflect the counterproductive effects of 21st century trade restrictions than the solar energy industry.

Since 2012, the US International Trade Commission has launched a "groundhog" campaign to eliminate external risks that threaten local photovoltaic module production. But after so many years, the industry in the United States has never experienced vigorous development. What is the reason? The most reasonable explanation is that American companies have shifted their focus to a much more profitable business - manufacturing computer chips. The substantial profits have enabled American manufacturers to cope with the industry turbulence caused by years of erroneous policies.

The trade war initiated by the United States in 2012 almost destroyed its domestic solar manufacturing industry. In addition, the United States has implemented different trade restrictions on the import of metallic silicon from six countries including Norway, Australia, Iceland, and Malaysia, forcing American polysilicon manufacturers to pay more for the import of key raw materials.

The unfriendly attitude of the domestic government towards the development of clean energy, the high costs that international competitors do not need to bear, and the explosive demand for artificial intelligence chips worldwide, make it easy to understand why American polysilicon producers who have survived this period have turned to chip manufacturing instead of solar energy manufacturing.

This trade protection movement has misdiagnosed the true crux of the US solar industry. China's ability to dominate solar polycrystalline silicon production is not due to subsidies, but rather to its huge scale advantage. These scale advantages are built on stable demand expectations, and the intermittent policies of the United States in energy transition are simply incomparable to them.

To survive in the harsh industry environment, enterprises need stable and predictable policies to fully tap into limited market space. Imposing tariffs does not provide these conditions.