Trump orders new 15% tariff on key material for solar panels and microchips
Move to raise levy on goods made with polysilicon aims to protect domestic US supply chains from China, the major producer Donald Trump has ordered a new 15% tariff on imported products made of polysilicon, an important ingredient in microchip manufacturing that is primarily produced by China. The new tariff, which will take effect on 4 December, is aimed at supporting US chip and solar panel…
In a move aimed at bolstering US domestic supply chains, President Donald Trump has announced a 15% tariff on imported goods containing polysilicon, a crucial component for microchip manufacturing and solar panel production. This new levy, set to take effect on December 4th, is designed to safeguard US competitiveness in artificial intelligence and energy sectors, primarily in the face of China's dominant production capabilities.
Polysilicon, an ultra-pure form of silicon, plays a pivotal role in the creation of semiconductors essential for AI processing, data centers, and solar energy generation. US solar factories have previously accused their Chinese counterparts of dumping cheaper panels onto the market, a practice enabled by government subsidies and the offshoring of manufacturing to sidestep US tariffs.
China's Ministry of Foreign Affairs responded to the latest tariff by accusing the US of overstretching the concept of national security and abusing state power to target Chinese businesses. The ministry argued that protectionism would not enhance US competitiveness and would disrupt normal trade and economic exchanges between the two nations.
The US possesses two primary polysilicon factories, one operated by Hemlock Semiconductor in Michigan, a joint venture between Corning and Japan's Shin-Etsu Handotai, and another run by Wacker Chemie in Tennessee. Both companies expressed support for the new tariff, citing its potential to encourage investment in US capacity and bolster long-term competitiveness in the semiconductor supply chain, advanced computing infrastructure, and broader defense and security interests.
President Trump's decision to impose this tariff was based on recommendations from Commerce Secretary Howard Lutnick. Lutnick suggested minimum import prices for polysilicon, polysilicon ingots and wafers, solar cells, and solar modules: $21 per kilogram, $100 per kilogram, $0.22 per watt, and $0.38 per watt, respectively. The executive order also allows the Commerce Department to establish an incentive program for companies investing in polysilicon or derivative product factories.
This tariff comes amidst China's recent surge in exports, with the country's shipments of AI-related products increasing by 23.9% in dollar terms year-on-year in July. The consultancy Oxford Economics noted that China's strong electronics and machinery exports, combined with industrial input imports, suggest that AI and electrification will drive global manufacturing.
Despite potential disruptions from the Middle East, the consultancy predicts that China's competitiveness in AI hardware, electric vehicles, batteries, and other high-value manufacturing will enable it to maintain its global export market share, even if demand softens.
Written by urgent.news from Guardian Technology's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
