Trump's 15% polysilicon tariff targets China's 90% supply grip

Trump on Thursday imposed a 15 percent tariff and minimum import prices on polysilicon and derivatives under Section 232, targeting China's control of over 90 percent of global supply of the solar and semiconductor material.

"First Solar strongly commends the Trump Administration's Section 232 national security action on polysilicon and its derivatives, one of the most strategically significant trade measures in decades," said Mark Widmar, chief executive officer at First Solar. "This action closes that loophole, and it is built to be enforced, with a minimum import price, an ad valorem tariff behind it, and real consequences for violators."

The proclamation establishes minimum import prices of $21 per kilogram for polysilicon, $100 per kilogram for ingots and wafers, $0.22 per watt for solar cells and $0.38 per watt for modules, paired with the 15 percent ad valorem tariff. A tariff offset program rewards companies committing to build, refurbish or expand US production of polysilicon, ingots, wafers and cells, with greater benefits for imports that use US-produced polysilicon. Importers must certify that the first arm's-length sale in the United States meets the applicable minimum price, with a permanent import ban for falsified certifications.

The action follows a year-long Commerce Department national security investigation and escalates the trade fight beyond the Section 301 tariffs that raised duties on Chinese polysilicon and solar wafers from 25 percent to 50 percent in January 2025. For First Solar, which expects to invest more than $5 billion in American manufacturing and R&D infrastructure by 2026 and reach approximately 17 gigawatts of US module capacity by 2027, the policy removes a structural disadvantage against Chinese competitors that have dumped below-cost product into US markets.

Minimum Prices Set Across the Supply Chain

The tariff structure is designed to be difficult to circumvent. The offset program's benefits run with the facility's construction period, bridging committed investors through ramp-up to full vertical integration; when it sunsets, companies still relying on imports pay full freight. The proclamation also targets related-party manipulation and foreign-subsidy transfers — the schemes that gutted the European Union's minimum-price regime a decade ago.

The semiconductor industry, which accounts for about 2.4 percent of global polysilicon demand according to the Semiconductor Industry Association, stands to benefit from the same supply-chain protection. "China has dominated the polysilicon market through massive subsidies and chronic oversupply, weakening competitors by pushing prices below sustainable levels," said Craig Singleton, senior fellow at the Foundation for Defense of Democracies. "Combining a minimum price with tariffs could improve the survival conditions for US producers, but the policy must be carefully designed to maintain reliable overseas supply chains until domestic wafer and solar cell production capacity is sufficiently expanded."

China Responds as US Builds Domestic Capacity

China pushed back against the measures. "China urges the United States to promptly halt tariff measures under Section 232 and to properly address the concerns of all parties through equal dialogue," a spokesperson for the Chinese Embassy in the US said.

First Solar operates the largest solar manufacturing and R&D footprint in the Western Hemisphere, with five operational plants in Alabama, Louisiana and Ohio and a sixth under construction in South Carolina, with the first phase expected to begin operations in the second half of 2026. A study by the University of Louisiana at Lafayette estimated the company supported nearly 30,000 American jobs and $3.0 billion in labor income in 2025, contributing approximately $5.8 billion to US gross domestic product. The analysis projects that by 2027, First Solar will support more than 39,000 jobs and $4.0 billion in labor income, contributing approximately $7.8 billion to US GDP.

Solar manufacturing industry groups and bipartisan federal lawmakers stressed in comments to the Commerce Department that supply from non-Chinese producers such as Korea's OCI Holdings and Germany's Wacker Chemie is needed until US production of polysilicon, wafers and solar cells is sufficiently expanded. The Coalition for a Prosperous America, which submitted comments in the investigation, called the proclamation "the most significant global trade protection action for the American polysilicon and solar industry in the modern era." Jon Toomey, CPA president, said the action ends "the endless game of AD/CVD whack-a-mole" that American manufacturers have fought for decades through case-by-case trade litigation.

For solar project developers reliant on imported Chinese polysilicon, the new price floors could raise module costs, creating a bifurcated market where domestic manufacturers gain pricing power while import-dependent developers face margin pressure. The offset program's design, which rewards companies building US production capacity, is intended to accelerate the transition toward domestic supply before the program sunsets.

This article is for informational purposes only and does not constitute investment advice.