The Biden administration increases tariffs on solar materials from China.
This is happening at a time when solar energy is becoming the fastest-growing source of electricity in the United States.
Starting January 1, 2025, tariffs on solar wafers, polysilicon, and certain tungsten products coming from China will significantly increase, as announced by the Biden administration. This measure will result in a rise in the prices of essential materials for the manufacturing of solar panels, at a time when solar energy is positioning itself as the fastest-growing source of electricity in the United States. Polysilicon is crucial in the production of solar wafers, which act as semiconductors in the panels. Tungsten, used in traditional incandescent light bulbs, has multiple applications in electronics due to its high melting point and is also vital in the supply chains of various industries, including aerospace, automotive, defense, medical, as well as oil and gas.
This tariff increase is part of a broader strategy by the U.S. government to strengthen domestic clean energy supply chains in response to China's dominance in solar manufacturing. The Xinjiang region in China, renowned for these productions, also faces serious allegations of forced labor and human rights violations. The Office of the U.S. Trade Representative (USTR) has indicated that the decision to raise tariffs is the result of an investigation into cyber theft and economic espionage by China.
Katherine Tai, USTR Ambassador, stated that "the tariffs announced today will help counter the harmful policies and practices of the People's Republic of China." According to Tai, these actions will complement the internal investments made under the Biden-Harris administration aimed at fostering a clean energy economy and enhancing the resilience of critical supply chains.
The new tariff structure will double the tariffs on polysilicon and solar wafers from 25% to 50%. Likewise, tariffs on certain tungsten products will increase from 0% to 25%. It is noteworthy that Chinese companies produce over 75% of the world's polysilicon, and in all manufacturing processes of solar panels, China controls more than 80% of global capacity.
American manufacturers welcomed this decision. Mike Carr, executive director of the Solar Energy Manufacturers Coalition (SEMA), remarked that "these trade measures will begin to counteract China's widespread government subsidies in solar production. It's a step in the right direction." However, it should also be considered that China's policies aimed at promoting solar manufacturing have contributed to a reduction in solar panel prices worldwide. Similarly, Chinese companies have produced significantly more affordable electric vehicles compared to American manufacturers, which has also led to imported electric vehicles from China facing tariffs that have increased from 25% to 100% during the Biden administration.
Furthermore, in May, the president announced that tariffs on battery parts and lithium-ion batteries would increase from 7.5% to 25%. Tariffs on solar cells would also rise from 25% to 50%. By 2025, tariffs on semiconductors coming from China are set to double, reaching 50%. Donald Trump, the elected president, has expressed his intention to further increase tariffs on goods imported from China, which is anticipated to affect the prices of products such as cars and electronic devices.
