U.S. Prepares Polysilicon Tariffs...Will Korea Benefit Amid China Targeting?

Key Material for Solar and Semiconductor Products
Minimum Price System to Be Introduced Simultaneously
Chinese Products Expected to Lose Further Price Competitiveness

The U.S. administration under President Donald Trump is expected to announce, as early as August 6 (local time), a plan to impose a 15% tariff on polysilicon—a key material for solar and semiconductor products. This move is being analyzed as an import restriction measure specifically targeting China. While some anticipate that Korean companies competing with China may benefit indirectly, experts believe the actual impact will only become clear once detailed regulations are released.

"Minimum Import Price Will Also Apply...Aiming to Prevent Dumping"

U.S. President Donald Trump is giving a speech at an event held at a casino in Las Vegas on the 5th (local time). Photo by AP

According to Bloomberg and other foreign news outlets on August 5, the Trump administration is set to announce the results of an investigation, possibly as early as August 6, which includes a plan to impose a 15% tariff on foreign-made polysilicon derivative products. The scope of application includes polysilicon for raw materials, wafers, solar cells, and solar modules. The United States has conducted a related investigation for more than a year under Section 232 of the Trade Expansion Act, considering polysilicon as critical for national security.

The administration is also reportedly planning to introduce a Minimum Import Price (MIP) system alongside tariffs to further erode the price competitiveness of Chinese-made products. This system would prevent Chinese companies—who receive domestic subsidies and engage in dumping at below-cost prices—from selling in the U.S. market below a certain price threshold.

The United States has expressed concern over China’s dominance in the global polysilicon market and has implemented regulations for over a decade. After it became apparent that the Xinjiang Uyghur Autonomous Region occupies a significant share in China’s solar industry, the U.S. introduced additional related measures. According to the ‘Polysilicon Market Outlook’ report published by market research firm Bernreuter Research in June of last year, the three largest polysilicon manufacturers outside China have virtually stopped using Chinese raw materials. The previous Biden administration raised tariffs on Chinese polysilicon and solar wafers from 25% to 50% in December 2024.

Key Issues: Exemptions and Relief Measures

The level of detail and rigor in the application of these tariffs is a matter of interest. Analysts in the securities industry have predicted that Korean polysilicon manufacturers with production bases outside China could benefit. However, the actual impact on individual companies will largely depend on the specific implementation plans, exemption details, and relief measures for U.S.-based manufacturers.

In an opinion letter submitted to the U.S. Department of Commerce in August last year, the Korean government requested "special consideration" for Korean companies, stating that restricting polysilicon imports could disrupt domestic firms’ investments and supply chains in the U.S. The government specifically mentioned Hanwha Qcells’ solar panel factory in Georgia and OCI’s solar cell factory in Texas, arguing that Korean companies contributing to supply chain diversification should be excluded from tariffs and other import restrictions.

Korean companies have also formally requested exemptions. Hanwha Qcells argued that, while protecting U.S. production, the United States should allow duty-free imports by applying a low-tariff-rate quota (TRQ) on German- and Malaysian-made polysilicon. The company specifically noted that its U.S. modules are manufactured using Malaysian polysilicon. OCI requested that its semiconductor-grade polysilicon be excluded from the investigation, emphasizing that forced labor and Foreign Entity of Concern (FEOC) involvement have been eliminated from its supply chain.

Craig Singleton, Senior Fellow at the Foundation for Defense of Democracies (FDD), told foreign media, "Applying both minimum import prices and tariffs would give U.S. polysilicon manufacturers room to survive," but added, "Until wafer and cell production capacity in the U.S. is sufficient, policies should be carefully designed to ensure a stable supply of raw materials from allied countries."

Following news of these new regulations, shares of U.S. solar companies expecting increased costs plunged. First Solar and T1 Energy both experienced intraday declines of up to 7.3% and 13%, respectively. The Trump administration, apparently aware of these potential tariff impacts, is reportedly preparing a ‘temporary offset program’ to protect domestic manufacturers who depend on imported raw materials.

This content was produced with the assistance of AI translation services.