Trump imposes minimum prices, tariffs on polysilicon imports to boost domestic industry

President Donald Trump has signed a proclamation to establish minimum import prices for polysilicon, a key material for semiconductors and solar panels, and impose a 15% tariff on certain derivative products. The administration cited concerns that imports of these materials threaten U.S. national security and stated the need to adjust imports to rebuild the American polysilicon industry. This action follows a Section 232 investigation by the Commerce Department, which allows the president to take measures like tariffs or import restrictions if certain imports are deemed a threat to national security.

The proclamation sets minimum import prices at $21 per kilogram for polysilicon, $100 per kilogram for polysilicon ingots and wafers, $0.22 per watt for solar cells, and $0.38 per watt for solar modules. Importers must prove their U.S. sale price exceeds these minimums; otherwise, they will be subject to tariffs equivalent to the difference. Additionally, downstream derivative products listed in the proclamation will face a 15% ad valorem tariff. Both the price floors and tariffs are set to take effect on December 4.

Adjustments are made for specific countries. For South Korean products, the combined tariff rate, including existing tariffs and the new Section 232 tariff, will be capped at 15%. Similar adjustments apply to products from Japan, Taiwan, Switzerland, Liechtenstein, and the European Union. For British products, a separate 10% Section 232 tariff is applied.

The Trump administration is also introducing an "onshoring program" to support companies investing in U.S. production facilities. Companies planning to build, renovate, or expand polysilicon, ingot, or wafer production facilities in the U.S. by January 20, 2029, can submit plans for Commerce Department review and approval. Approved companies may import production equipment and raw materials without the Section 232 tariff, based on their investment scale and construction progress. However, failure to meet investment commitments or intentional misrepresentation to the U.S. government could lead to retroactive cancellation of tariff benefits and penalties.

The White House highlighted that the U.S. share of global polysilicon production capacity has fallen from 50% in 2005 to less than 2% in 2024. Similarly, U.S. semiconductor wafer production share decreased from 37% in 1990 to 10% in 2024, and the country relies heavily on imports for solar ingots, wafers, and cells. President Trump emphasized that polysilicon is a foundational material supporting the security of the U.S. semiconductor and solar power supply chains, noting semiconductors' critical role in defense systems. While the measures aim to curb oversupply from cheap Chinese products and boost domestic production, concerns exist about potential increases in solar module prices and project costs due to higher import prices. However, U.S. solar companies with domestic production facilities welcomed the move as a comprehensive measure to protect the entire supply chain.