[News] U.S. to Double Tariffs on Chinese Solar Wafers and Polysilicon

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According to a report from Central News Agency, the Office of the U.S. Trade Representative (USTR) announced today (11th) that the Biden administration will impose Section 301 tariffs on solar wafers, polycrystalline silicon and certain tungsten products imported from China.

Citing a report from South China Morning Post, the report states that the Office of the U.S. Trade Representative announced that China’s import tax rate on solar wafers and polysilicon (an essential component in solar panels) will double from the current 25% to 50%. The tax rate for specific tungsten products, which is used to manufacture semiconductors, will be raised from 0% to 25%.

The new tariffs imposed by Joe Biden will take effect on January 1 next year, as indicated by the report.

In May of this year, the Biden administration announced that it would significantly increase tariffs on related imports from China targeting key industries such as electric vehicles, semiconductors, batteries, and solar cells, as the report from Central News Agency notes. A report from CNN indicates that the tariff hikes announced in May has been finalized in September, including 100% tariff on electric vehicles, 50% on solar cells and 25% on electrical vehicle batteries, according to U.S. Trade Representative.

A report in Commercial Times notes that China’s silicon materials and silicon wafers account for more than 80% of global production capacity. Therefore, industry sources suggest that such tariffs will only increase the cost of producing solar silicon wafers and solar cells in the U.S. and is not conducive to the development of these two manufacturing industries in the U.S., as indicated by the report from Commercial Times.

Such tariff might benefit silicon material factories and fabs outside China, as mentioned by the report from Commercial Times. Companies with fabs in Southeast Asia, such as JA Solar and Trina might also benefit from the newly imposed tariffs. However, Taiwanese companies will benefit only to a limited extent, as the report notes.

To counter the U.S., the Chinese government has launched an antitrust investigation into AI chip giant NVIDIA this week. Also, the Chinese government recently announced the implementation of export controls on key minerals such as germanium and gallium exported to the U.S.

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