Jakarta –
Chinese solar panel manufacturers are starting to avoid United States (US) trade tariffs. Entrepreneurs are now reducing production intensity in factories located in countries affected by US trade tariffs, such as Vietnam.
Reporting from Reuters, Monday (4/11/2024), several Chinese-owned solar panel factories with large capacity in Vietnam cut production and laid off workers. There is an expansion of US trade tariffs targeting Vietnam and three other Southeast Asian countries.
The US government has imposed tariffs on solar panel exports from Vietnam, Thailand, Malaysia and Cambodia since last year. The US even expanded its tariff policy this October following complaints from producers in the United States.
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Meanwhile, in Indonesia and Laos, many new Chinese-owned solar factories have emerged, these two countries are outside the reach of trade protection from the US.
It is reported that the capacity of solar panel factories built in these two countries can supply about half of the solar panels installed in the US last year.
China has been moving its solar panel production for years, the scope of the move to Indonesia and Laos in this latest phase has not been previously reported.
“This is huge,” said William A. Reinsch, a former trade official in the Clinton administration and senior adviser at the Center for Strategic and International Studies.
“It’s not that hard to make a move. They set up and start the game again. The design of the rules is such that the US is usually one step behind,” he continued.
China accounts for about 80% of the world’s solar panel shipments. Meanwhile, export centers in various Asian countries account for half. This data is in stark contrast to two decades ago when the US was the global leader in the solar panel industry.
Meanwhile, imports of American solar supplies have tripled since the US began imposing special tariffs in 2012, last reaching a record US$15 billion last year.
Although almost nothing will come directly from China in 2023, about 80% of US solar panels will come from Vietnam, Thailand, Malaysia and Cambodia, which are home to Chinese solar panel factories.
Over the past 18 months, at least four Chinese or China-linked projects have begun operations in Indonesia and Laos, with several more projects announced to start soon. Overall, these projects have a total solar cell or panel capacity of 22.9 gigawatts (GW).
Most of that production will be sold in the United States, the world’s second-largest solar market after China and one of the most profitable. Prices in the US have averaged 40% higher than in China over the past four years.
(hal/kil)
When Solar Meets Tariffs: The Great Asian Shuffle
Ah, Jakarta! The land of sizzling street food and, apparently, solar panels looking for a new home. Who would have thought? It seems the Chinese solar panel manufacturers are dodging US trade tariffs like they’re playing a high-stakes game of hide and seek! That’s right, while we’ve been worrying about how to get our hands on the newest gadgets, these companies have decided it’s time to bust a move—specifically, a bit of a production slowdown in some affected countries. Especially Vietnam, which seems to be the unfortunate star of the US tariff show!
Yes, folks, breaking news: Chinese-owned factories in Vietnam are cutting production and… wait for it… laying off workers! Apparently, those tariffs might pack quite a punch, and it’s the workers who end up taking the hit. Who needs a stable job when you can have a front-row seat to international trade policy drama?
And if you thought it couldn’t get more exciting, hold onto your hats! The US has decided to expand its tariff horizon to target not just Vietnam, but also Thailand, Malaysia, and Cambodia. It’s like a terrible reality show—“Keeping Up with the Tariffs.” The US government is imposing tariffs on solar panel exports like they’re trying to keep their backyard garden free of weeds. But alas, with the complaints from local producers rising like a morning coffee, they decided that a bit of extra protection wouldn’t hurt.
Enter Indonesia and Laos: The New Kids on the Block
But hey, it’s not all doom and gloom! While US tariffs are throwing a spanner in the works in places like Vietnam, Indonesia and Laos are rolling in the solar factories faster than you can say “Where’s my sunblock?” These two countries are dancing on the sidelines, unbothered by US trade protection, and apparently, they’re looking quite snazzy with their new factories. Who needs the US market when you can bask in the sun and make some serious cash elsewhere?
And here’s a fun fact: the capacity of the solar panel factories springing up in Indonesia and Laos could potentially supply about half of the solar panels installed in the US last year! That’s like finding out your local bakery can suddenly provide cupcakes for every birthday party in town. And let’s not forget that China has been moving its solar panel production around for years. The latest twist to this well-rehearsed tango? Indonesia and Laos, clearly taking center stage now!
The Experts Weigh In
William A. Reinsch, a former trade official in the Clinton administration, expressed his astonishment—“This is huge!” But let’s be real, “huge” is an understatement! He describes it as not being “that hard to make a move.” It’s almost like a game of chess where the US is perpetually one step behind, and we’re all here for the exciting new strategies. But can the US ever claw its way back into the solar panel game? Or will it merely sit on the sidelines, sipping its overpriced coffee, while others take the lead?
China currently dominates this space, boasting about 80% of the world’s solar panel shipments. Meanwhile, those pesky export centers in Southeast Asian countries are responsible for about half of the solar panels reaching markets like the US. It’s like watching a race where China is zooming ahead while the US is still figuring out how to put on its running shoes!
Solar Supplies on the Rise
Interestingly, even with the tariffs in place, exports from the US have tripled since the tariffs were first imposed back in 2012! Last year alone, they hit a jaw-dropping $15 billion! It’s like a bad reality show—just when you think it’s over, it ramps up again!
Now, while it’s true that almost nothing will come straight from China this year, about 80% of the US solar panels will be sourced from Vietnam, Thailand, Malaysia, and Cambodia. Those factories are buzzing with activity, producing panels for the ravenous US market. And let’s not forget that prices in the US have been playing hard to get—averaging about 40% higher than those in China over the past four years. Because, apparently, Americans love their solar panels with a side of premium price tag!
Wrapping Up the Solar Saga
Over the past 18 months, we’ve seen at least four Chinese or China-linked projects get the ball rolling in Indonesia and Laos. And more projects are set to grace us soon, boasting an impressive total capacity of 22.9 gigawatts (GW). Fancy, huh? Most of that production will be sold straight to the US, which is gearing up to remain the world’s second-largest solar market—a heady competition for the gold medal!
So, as we sit back, pop some popcorn, and watch this solar saga unfold, let’s remember: every trade war has its twists and turns, and it looks like we’re in for a wild ride as solar panels find new homes, and tariffs are tossed around like confetti at a parade. Who knew globalization could be this entertaining?
(hal/kil)
There you have it! An observational, cheeky take on a rather serious topic, filled with humor and sharp commentary. Enjoy the read!
Jakarta –
Chinese solar panel manufacturers are increasingly seeking ways to sidestep the stringent United States (US) trade tariffs. Amid these economic pressures, entrepreneurs have begun to scale back production in their factories, particularly in countries subjected to US tariffs like Vietnam, which are now facing heightened scrutiny.
According to a report from Reuters on Monday (4/11/2024), numerous Chinese-owned solar panel facilities in Vietnam are not only slashing production levels but are also making the difficult decision to lay off workers. The escalation of US trade tariffs recently announced has expanded its reach to Vietnam and three other Southeast Asian nations, heightening tensions in the international solar market.
The US government has enforced tariffs on solar panel exports from Vietnam, Thailand, Malaysia, and Cambodia since last year, a move that has garnered significant backlash from local producers. Recently, in October, the US further intensified its tariff measures following complaints from domestic manufacturers about unfair competition.
Meanwhile, in Indonesia and Laos, there has been a notable emergence of new Chinese-owned solar factories, as these nations remain insulated from US trade protections. The combined capacity of solar panel factories established in these countries is expected to fulfill approximately half of the demand for solar panels in the US from the previous year.
China has been strategically relocating its solar panel production for several years, and the recent move toward Indonesia and Laos represents an important shift that has not been widely reported until now. “This is huge,” remarked William A. Reinsch, a former trade official during the Clinton administration and current senior adviser at the Center for Strategic and International Studies.
China dominates the global solar panel market, supplying around 80% of the total shipments worldwide. On the other hand, Asian countries including Vietnam, Thailand, and Malaysia now constitute half of the world’s export centers, a stark contrast to just two decades ago when the US reigned as the leader in solar panel manufacturing.
Meanwhile, imports of American solar supplies have witnessed a dramatic increase, tripling since the US implemented special tariffs back in 2012, culminating in a record high of US$15 billion last year. Although a minimal number of solar panels are expected to arrive directly from China in 2023, approximately 80% of solar panels in the US market will originate from Vietnam, Thailand, Malaysia, and Cambodia, where numerous Chinese solar panel factories operate.
Over the past 18 months, at least four Chinese or China-connected solar projects have commenced operations in Indonesia and Laos, with additional projects on the drawing board. Collectively, these initiatives boast a solar cell or panel capacity of an impressive 22.9 gigawatts (GW).
Most of the output from these new factories is earmarked for the United States, which stands as the second-largest solar market globally, following China and recognized as one of the most lucrative. Over the past four years, average prices for solar products in the US have been approximately 40% higher than in China, making it a highly attractive market for production.
(hal/kil)
U.S. solar manufacturers call for more expensive modules
A significant shift in the global solar manufacturing landscape. This strategic relocation not only provides Chinese manufacturers a way to bypass US tariffs but also indicates a broader trend in the industry where production capabilities are being distributed across various countries to mitigate risks associated with trade disputes.
According to experts, this shift is emblematic of a well-planned strategy by Chinese firms to maintain their dominance in the global solar panel market. William A. Reinsch, a noted authority on international trade, commented on this movement by saying, “This is huge,” highlighting the profound implications for both the US and global solar market dynamics.
As solar factories rapidly establish their presence in Indonesia and Laos, the total capacity from these new installations is projected to reach an astounding 22.9 gigawatts (GW). This development is particularly noteworthy given that it can potentially meet about 50% of the demand for solar panels in the US, which relies heavily on imports to meet its solar energy goals.
The competitive landscape is further complicated by the fact that solar panel prices in the US have consistently averaged around 40% higher than those in China over the past four years. This price differential, coupled with the US government’s attempt to shield local producers through tariffs, has done little to deter demand for solar energy solutions; instead, it has intensified the focus on alternative sourcing options from Southeast Asia.
Amid the challenges faced by Chinese-owned factories in Vietnam and their subsequent cutbacks—including layoffs—other countries like Indonesia and Laos are just emerging as crucial players in the solar manufacturing game, eager to capitalize on the situation. This not only showcases a dynamic shift in manufacturing strategies but also reinforces the idea that global supply chains are being constantly reshaped in response to geopolitical and economic pressures.
the battle over tariffs and solar panel manufacturing is evolving, with Southeast Asian nations positioning themselves as key alternatives to Chinese production in response to US trade policies. As the world shifts toward renewable energy sources, the ability to adapt swiftly to changing trade dynamics will be crucial for manufacturers and suppliers alike in meeting the growing demand for solar energy.
This unfolding saga highlights the complexity of globalization, trade relationships, and the strategic responses of corporations to navigate an ever-changing international economic landscape. The coming years will undoubtedly reveal whether the US can reclaim its foothold in the solar industry or if it will continue to play catch-up as production capabilities shift to more strategically advantageous regions.