Chinese solar companies are ceasing part of their production in Southeast Asia after the US tariff exemption expires

BEIJING (June 7): Two of the world’s largest solar panel makers said they would halt some of their production in Southeast Asia this week after a suspension of U.S. tariffs on solar panels from some Southeast Asian countries expired.

Chinese company LONGi Green Energy Technology Co Ltd said on Friday it had suspended production at a battery plant in Vietnam. Trina Solar Co Ltd said on Thursday that plants in Thailand and Vietnam would be shut down for maintenance.

LONGi said its further decisions would follow an assessment of market conditions. The company said the production halt in Vietnam will have a limited impact on its operating performance as the country will account for less than 10% of LONGi’s total battery production capacity in 2023.

LONGi also said that some of its other factories in Southeast Asia, which had been reported to be closing, were still operating.

Without specifying which media reports it was referring to, it said the plants in Malaysia and the component plants in Vietnam were operational.

The news comes after LONGi said on Tuesday that the company would “adjust” its production, citing a “complex industry environment” but remaining optimistic about the future of the sector.

On Thursday, a two-year US tariff exemption for solar modules from four Southeast Asian countries expired.

The tariffs target shipments from companies that have been proven to evade US tariffs on Chinese goods by manufacturing panels in Malaysia, Thailand, Cambodia and Vietnam.

The competing solar module manufacturer Trina Solar said in a statement to Reuters on Thursday that its plants in Thailand and Vietnam, which primarily serve the U.S. market, would go into maintenance at mid-year.

Demand in the U.S. market is currently experiencing some short-term fluctuations due to political changes, Trina Solar said, adding that the company’s production plans will depend on industry and market conditions.

Trina Solar also announced that the company is building new cell and module capacities in Indonesia, where US tariffs do not apply. Operations are expected to begin in the third quarter. The joint venture partner is the state-owned Indonesian energy supplier PT PLN (Persero).

“In the long term, Trina Solar aims to strengthen its market position and mitigate international trade risks through a broader and more diversified footprint and localized operations,” the company said.

The US also announced sharp tariff hikes on Chinese imports last month, including solar panels, electric vehicles and batteries. However, these are unlikely to have much impact on Chinese manufacturers, as the US imports few solar panels directly from China.