Trump signed an order: Imposing a 15% tariff on imported polysilicon and setting a minimum price, the stock prices of local solar manufacturers rose sharply in response

The Zhitong Finance App learned that US President Trump has ordered new tariffs and price limits on imported polysilicon used in semiconductors and solar panels, and warned that America's dependence on foreign supply threatens national security.

According to Trump's instructions, imported polysilicon derivatives, including silicon wafers, photovoltaic cells, and solar modules, will be subject to 15% tariffs starting December 4. The president signed the proclamation on Thursday.

The measure also set minimum import prices: $21 per kilogram for polysilicon; $100 per kilogram for polysilicon ingots and wafers; 22 cents per watt for solar cells; and 38 cents per watt for solar modules.

The move is aimed at encouraging the localized production of polysilicon and its products, and potentially helps nurture the solar energy supply chain that has struggled for more than a decade to take root in the US. Prior to the introduction of this measure, the US initiated a series of trade lawsuits, which led to the imposition of tariffs on photovoltaic equipment from Asia and some Southeast Asian countries. Foreign manufacturers have been found to evade tariffs by shifting production between countries.

New import fees also risk driving up the cost of solar modules, which is yet another obstacle for renewable energy developers already dealing with the loss of federal subsidies and the Trump administration's shift to supporting rival fossil fuels.

Shares of companies with local solar energy manufacturing businesses soared in after-hours trading. Shares of First Solar, America's largest solar manufacturer, rose as much as 8%. T1 Energy is up 6.3%.

Although the US was a leader in polysilicon production in the early to mid-21st century, Chinese companies rose to prominence and became the world's leading producer by the end of the last decade.

The executive order directed the establishment of an incentive program to attract the production of polysilicon and its derivatives in the United States, and the Secretary of Commerce was authorized to reach agreements with specific companies to stimulate related investments.

Under Trump's orders, if the company's investment is linked to its investment in the US (that is, a so-called “return plan” and is reviewed by the Secretary of Commerce), these companies will also be able to receive tariff relief under certain circumstances. Businesses with return plans approved by the government will be able to import some necessary production equipment and inputs without paying the newly stipulated tariffs.

Delaying the implementation of tariffs is a blow to US manufacturers, which previously warned that it would give renewable energy developers time to boost cheap imports and build up duty-free equipment inventories. But Trump's order states that the administration will monitor trade and act to restrict imports from companies found to be hoarding polysilicon or polysilicon derivatives.

Local supply chain support

Manufacturing allies welcomed the move.

Prosperous America Coalition Chairman Jon Toomey said, “This is the first time that the US has protected the entire solar supply chain through a single action — and rewards producers that manufacture there — while taking significant steps to strengthen the local semiconductor supply chain. That's how you keep an industry coming back.”

US solar manufacturers, including Daiichi Solar, T1 Energy, and Hanwha qCells, appreciated Trump's actions. Dan Barcello, CEO of T1 Energy, called it “a decisive victory for American advanced manufacturing and investment in the local energy supply chain.”

Trump's announcement opened the door for direct US investment in certain battery and silicon wafer manufacturers. The US has previously used other methods to try to stimulate this production capacity, including providing tax credits to developers installing American-made solar equipment, but these policies have been phased out.

The core of the debate is solar-grade and electron-grade polysilicon — purified silicon crystals that are widely used to drive modern lifestyle technology. Electron-grade polysilicon is essentially the starting point of the semiconductor manufacturing chain and is an essential foundation for everything from smartphones and medical devices to precision guidance weapons and flight control systems.

Solar-grade polysilicon has lower purity but is more common, and is the primary raw material for crystalline silicon solar panels used to generate electricity.

These tariffs are the result of an investigation launched by the Department of Commerce in July last year, which covers raw materials and derivatives, exposing broad supply chains to potential taxation and import restrictions. This is one of many investigations initiated under section 232 of the Trade Expansion Act of 1962, as Trump is seeking to further enhance local manufacturing capabilities and diversify the US supply chain.

The President is working to rebuild the global tariff system after the US Supreme Court ruled against the first wave of tariffs imposed by it under the International Emergency Economic Powers Act.

Proponents of polysilicon in the US argue that without any trade support, US solar-grade polysilicon production is unprofitable at current prices, and they encourage the government to focus relief measures on products from or linked to China, the world's leading supplier. They said the goal should be to set tariffs high enough to offset Asia's excess capacity and below-cost pricing.