US plans 15% tariff on key semiconductor, solar panel material

The Trump administration is reportedly preparing to impose a minimum 15% tariff on imported polysilicon, a critical raw material used in the manufacturing of semiconductors and solar panels. Citing sources, Reuters reported that the administration is expected to announce the findings of its Section 232 investigation into polysilicon as early as July 6.

Polysilicon is a versatile material essential for a wide range of products, from smartphones and medical devices to precision weaponry. The proposed tariff could extend to various solar equipment, including raw polysilicon, wafers, solar cells, and modules. This measure is widely seen as an effort to reduce the United States' dependence on foreign supply chains, particularly those dominated by China, and to bolster domestic polysilicon production and related industries.

The U.S. government has intermittently explored tariffs or offered incentives for domestic companies over the past decade to counter China's dominance in the global polysilicon market. The current action is grounded in Section 232 of the Trade Expansion Act, which allows the president to adjust imports deemed a threat to national security. The Commerce Department has been investigating U.S. reliance on foreign polysilicon and related products since last year.

Details regarding the implementation of tariffs and minimum pricing, as well as specific relief measures for U.S. companies, are expected to be announced via a presidential proclamation. The potential impact on South Korean companies is a significant concern. The South Korean government had previously requested that any trade restrictions be applied flexibly to Korean firms, emphasizing that broad tariffs on polysilicon could disrupt bilateral economic ties and supply chains, especially as Korean companies are investing in U.S. solar and semiconductor production.