In its ongoing review of Sec. 301 tariffs on Chinese goods, the Office of the United States Trade Representative (USTR) today announced increased tariffs on certain tungsten products, wafers and polysilicon. The rates for tungsten products will increase to 25%, and the rates for solar wafers and polysilicon will increase to 50%, effective Jan. 1, 2025.
“The tariff increases announced today will further blunt the harmful policies and practices by the People’s Republic of China. These actions will complement the domestic investments made under the Biden-Harris Administration to promote a clean energy economy, while increasing the resilience of critical supply chains,” said Ambassador Katherine Tai.
The Sec. 301 tariffs were initiated by the Trump Administration in 2018 in response to the finding that “China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden or restrict U.S. commerce.”
These increased tariffs were part of a four-year review of that original investigation. In May, the USTR increased tariffs on EVs, solar cells, lithium batteries, steel and aluminum products and semiconductors from China. The office’s report on the Sec. 301 investigation said that China has targeted solar products, lithium-ion batteries and electric vehicles for export growth. The federal government aims to combat the new “big three” with these new tariffs — and support domestic production instead.
In receiving comments on this review, the USTR said nearly all supported increasing tariffs on polysilicon and solar wafers, noting the importance of the tariffs to grow domestic production. Considering the President’s direction to increase tariffs on Chinese solar cells to 50%, USTR determined to increase tariffs on polysilicon and wafers to 50% as well.
“Increasing tariffs on polysilicon and wafers will complement recent investments, encourage diversification away from Chinese sources, provide additional leverage with China to eliminate the investigated acts, policies and practices, and reduce vulnerability to those harmful acts, policies and practices,” reads today’s notice. “While increasing tariffs may result in higher prices initially, the tariffs are necessary to allow domestic producers to compete against China’s massive excess capacity, defend recent investments and encourage more domestic manufacturing.”
It’s unlikely U.S. solar panel assemblers interact much with Chinese solar wafers, as much of the supply to the United States comes from Southeast Asian countries instead. Avoiding Chinese polysilicon may be harder — seven of the Top 10 global polysilicon producers are located within China.
Mike Carr, Executive Director of the Solar Energy Manufacturers for America (SEMA) Coalition, released a statement on the tariffs: “SEMA greatly appreciates Ambassador Tai’s work on behalf of American solar workers to increase tariffs on China’s polysilicon and wafer imports. It is an important precedent that a 50% tariff will soon cover the whole solar module supply chain in China. These trade measures will begin to counter the pervasive Chinese government subsidies in solar manufacturing. It is a step in the right direction. But we must go a step further to expand this approach and address the significant trade distortion that exists outside of China from Chinese-owned solar companies to fundamentally help put U.S. workers on a more level playing field.”
