Malaysia being targeted as US plans massive solar energy tariffs on China, South-east Asian countries

KUALA LUMPUR, Aug 21 — South-east Asia’s solar industry boom could be threatened by looming US tariff hikes as the US and EU attempt to check China’s trade ambitions.

Bloomberg reported that the US is planning to significantly raise tariffs on four countries in particular that are seeing massive growth in the sector, namely Malaysia, Thailand, Vietnam and Cambodia with even higher tariffs for China.

The four South-east Asian countries currently account for more than 40 per cent of solar module production capacity outside China, with many Chinese firms setting up facilities in the region.

BloombergNEF predicts that the US will raise tariffs by around 30 to 50 per cent on South-east Asian solar producers while China could see a hike to 50 per cent from the current 25 per cent.

While Chinese solar energy companies are actively seeking alternative markets besides the US, they have also had to grapple with a domestic glut and many companies in China have either shut down or are closing overseas facilities.

Still, some Chinese manufacturers are playing the wait and see game, pausing their plans until the new tariffs are announced to consider moving facilities to countries such as Indonesia and Laos instead who are not considered tariff hike targets.

The coming US election could also influence tariffs as US Democrats could decide to raise tariffs sooner if it would help boost their chances.