US Solar Tariffs Threaten Exports But May Spark Southeast Asia's Green Energy Shift
TEHRAN (Tasnim) – Planned US tariffs on solar panels from Southeast Asia could devastate exports but may also catalyze long-delayed energy transitions across the region, analysts say.
The United States this month proposed steep new tariffs on solar panels manufactured in Cambodia, Vietnam, Thailand and Malaysia.
The decision follows a pre-Trump-era investigation into alleged unfair trade practices, primarily targeting Chinese-owned firms operating in those countries.
If approved in June, the new duties will build on existing Trump-era tariffs, which include a general 10% levy for most nations and a 145% rate on Chinese-made solar products.
China currently produces 80% of the world’s solar panels and dominates the entire supply chain.
“The new tariffs will practically make solar exports to the US impossible commercially,” said Putra Adhiguna, managing director at the Energy Shift Institute.
Southeast Asia supplied nearly 80% of US solar panel imports in 2024, despite recent growth in American domestic production.
Chinese firms, facing overcapacity at home and seeking to avoid Western trade restrictions, had moved much of their manufacturing to Southeast Asia.
The proposed duties vary widely — from around 40% for certain Malaysian shipments to more than 3,500% for some Cambodia-based producers.
While the tariffs could hit exports hard, they might also accelerate renewable energy efforts in the region.
“The tariffs and trade war are likely to accelerate the energy transition in Southeast Asia,” said Ben McCarron, managing director at Asia Research & Engagement.
He said China would intensify its push in nearby markets, advocating for policy reforms to enable faster green energy deployment.
Southeast Asia has been slow to shift from fossil fuels, despite falling solar and wind costs.
Last year, fossil fuels generated over 80% of Malaysia’s electricity. The country has set a target of 24% renewables by 2030, a goal critics say lags behind international climate commitments.
Muyi Yang, a senior energy analyst at Ember, called the tariffs a “double opportunity” for Southeast Asia.
Until now, the solar sector had focused on exports, exploiting local labor and materials.
“Cut off from the US market, it could instead focus on local energy transitions,” Yang said, creating a stable new demand base and shielding against global market shocks.
However, replacing the US as a buyer will be difficult.
“Success hinges on turning this export-led momentum into a homegrown cleantech revolution,” Yang added.
Some countries may be wary of oversupply.
“Many will hesitate to import massively, prioritizing trade balance and aims to create local green jobs,” said Adhiguna.
Indonesia and India already have policies favoring domestic solar production, underscoring the challenge for displaced Southeast Asian manufacturers.
