Malaysia’s solar industry is bracing for new tariffs under Trump’s administration, prompting calls for increasing local content in manufacturing rather than relocating. While past tariffs did not deter investments from Chinese firms, ongoing investigations into circumvention practices raise uncertainties. Key players like LONGi and Risen Energy continue to invest in Malaysia, but the future of solar manufacturing remains contingent on navigating U.S. trade policies and exploring new export markets.
The potential reimposition of solar tariffs by the Trump administration has raised serious concerns for Malaysia’s solar industry. Malaysian academic Tham Siew Yean suggests that enhancing local content is vital for sustainability instead of simply relocating operations to evade tariffs. Historically, Malaysia has attracted substantial foreign investment in the solar sector, driven by favorable fiscal incentives and the strategic avoidance of anti-dumping tariffs by Chinese manufacturers. Despite past interventions and investigations by the U.S. Department of Commerce regarding anti-circumvention practices, Malaysia has continued to see significant Chinese investments.
Under Trump’s first administration, a 30% safeguard tariff was imposed on solar imports, yet the subsequent moratorium under President Biden allowed duty-free imports, temporarily buoying the industry. Nonetheless, new countervailing and anti-dumping duties were introduced, aimed specifically at Malaysian solar panel manufacturers, setting concerns over future investments. The preliminary investigations revealed that while some companies were cleared, others were found circumventing duties, and further determinations on tariffs are pending until 2025.
Despite the uncertainties created by these tariffs, major companies like LONGi Green Energy and Risen Energy have made substantial investments in Malaysia, underscoring a resilient demand for solar manufacturing in the region. However, with the anticipated expansion of solar tariffs under Trump 2.0 and the potential targeting of new regions, the industry’s future remains in flux. Jinko Solar’s recent operational adjustments in Malaysia and its shift towards facilities in Saudi Arabia highlight the industry’s ongoing challenges. To adapt, firms may consider diversifying their export markets to reduce reliance on the U.S.
Ultimately, increasing local content in Malaysia may provide a more sustainable path forward, ensuring that the solar industry can withstand external pressures while remaining competitive in the global market.
Malaysia’s solar industry has evolved significantly over the past decade, attracting major players due to fiscal incentives and a favorable production environment. The country became a significant hub for solar manufacturing, especially for Chinese companies looking to circumvent tariffs imposed by the U.S. under both the Obama and Trump administrations. Given the changing political landscape, particularly the implications of renewed tariff measures under Trump 2.0, the trajectory of Malaysia’s solar market is under scrutiny.
In summary, Malaysia’s solar industry faces substantial challenges due to potential new tariffs under the Trump administration and existing complications from countervailing and anti-dumping duties. Despite these issues, significant investments from Chinese firms indicate ongoing confidence in Malaysia’s capability as a manufacturing hub. Focusing on increasing local content may provide a sustainable approach to navigate the difficult trade landscape while safeguarding the industry against future tariff threats efficiently. By diversifying markets and possibly adjusting operational strategies, Malaysia can reinforce its position within the solar sector.
Original Source: www.thinkchina.sg
