The US government formally announced on Tuesday (20th) that it would impose high tariffs on solar cells and modules imported from Cambodia, Malaysia, Thailand, and Vietnam, with some tariffs reaching as high as 3521%. This move aims to protect US solar manufacturers but may also create additional pressure on domestic renewable energy construction.

The US International Trade Commission (ITC) voted on Tuesday to determine that imports from these four countries harmed the domestic solar industry, marking the final hurdle for the tariffs to take effect. According to reports, these new tariffs will be implemented starting in June and represent a significant victory for US companies like Hanwha Q Cells and First Solar.

These companies previously alleged that low-priced imports from Southeast Asia undermined domestic production incentives, making it difficult to remain competitive even with tax incentives. Following this news, First Solar's stock jumped nearly 5% in midday trading on Tuesday, although it narrowed to a 2.38% increase, closing at $168.84 per share.

The US Commerce Department launched a year-long investigation last year, determining that some manufacturers in these countries were dumping products at below-cost prices due to government subsidies, constituting unfair competition. As a result of this investigation, some Cambodian manufacturers were hit with punitive tariffs as high as 3521% for failing to cooperate.

The tariffs for imports from other countries are also substantial, with Vietnam facing a 396% duty, Thailand 375%, and Malaysia relatively lower at an average of 34%.

Prominent manufacturers such as JinkoSolar face tariffs of 245% on exports to Vietnam and 40% on exports to Malaysia; Trina Solar faces 375% on exports from Thailand and over 200% from Vietnam; JA Solar's modules from Vietnam are likely facing a 120% tax rate. According to BloombergNEF, the US imported approximately $12.9 billion worth of solar equipment from these four countries last year, accounting for nearly 80% of total imports.

While solar energy is a major source of new electricity capacity in the US, the renewable energy sector faces challenges from some Congressional Republicans pushing for reductions in federal subsidies, creating more uncertainty in future growth potential. Although tariffs may protect domestic manufacturing, they could also delay solar construction, posing obstacles to the Biden administration's clean energy and carbon-neutral goals.