Trump’s ‘retrograde’ policies towards Chinese solar mostly harm US, report finds
US trade and investment barriers will not halt Chinese solar industry’s rapid global expansion – but may put American manufacturing projects at risk
US President Donald Trump’s “retrograde policy changes” towards China’s solar industry risk harming America’s own clean energy sector by driving Chinese firms to redirect their investment into other markets, according to a new report.
Chinese solar energy companies had agreed deals to build a string of factories to produce photovoltaic solar components in the United States, with over 20GW of capacity due to come online by the end of 2025, but future projects may now be at risk due to the Trump administration’s policies, the Sydney-based think tank Climate Energy Finance said in its overview of global solar manufacturing trends released on Monday.
“Tariffs can protect domestic manufacturers but at the cost of increasing costs for domestic consumers,” said Harry Martin, an analyst at the think tank.
“Policymakers in other jurisdictions should take note: imposing trade barriers on China will only redirect investment to other regions poised to benefit from its technological leadership,” Martin said.
“China is the energy gift horse of this century – why shut the stable door? Many nations are already positioning themselves by offering generous incentives.”
China’s outbound investment in clean technology “became a full-blown stampede” last year, with Chinese companies investing an estimated US$140 billion in projects outside China since 2023, the report said.
Until Trump’s election, Chinese companies were also targeting investments in the US. In 2024, China’s LONGi and US clean energy company Invenergy put a 5GW PV solar module factory in Ohio into operation, while Jiangsu Runergy commissioned a 2GW PV module facility in Alabama, the report noted.
But China’s solar industry is now shifting its attention to other markets. By 2030, Chinese companies will hold a majority share of module manufacturing capacity in the Middle East and North Africa – as they already do in Southeast Asia, the report predicted.
China preferred working through strategic partnerships and massive multiphase projects in Southeast Asia, the Middle East and North Africa, as well as the Global South more broadly in 2024, Climate Energy Finance said.
Government renewable energy targets, utility auctions, incentive programmes and long-term power purchase agreements are what attracted Chinese companies to invest in these regions, the report added.
By expanding into Southeast Asia, Chinese companies can supply Western energy consumers by “circumventing trade barriers” with solar PV manufacturing investments mainly located in Vietnam, Thailand, Cambodia and Malaysia, the report stated.
In late 2024, the US imposed anti-dumping and countervailing duties of up to 271 per cent on panels exported from certain Southeast Asian nations, which had affected Chinese projects in the region, the report noted.
“These new duties have exerted considerable financial pressure on Chinese manufacturers and prompted production cuts and idling factories in countries like Vietnam.”
But Chinese manufacturers “have responded by simply shifting production to currently tariff-exempt countries such as Indonesia and Laos”, Martin said.
Chinese companies are also “moving aggressively” in the Middle East and North Africa, according to the report, as they are “attracted” by free trade zones, affordable land, zero tariffs, strong government support, growing local demand and a strategic position to serve emerging and Western markets.