In a sweeping new move to force solar manufacturing supply chains onto U.S. soil, the Trump administration has formally proposed a 15% tariff and mandatory minimum import prices on polysilicon and all its derivative solar products, capping a 14-year U.S. effort to erode China’s decades-long dominance of the global clean energy sector. The new trade restrictions grow out of a national security investigation launched by Washington in July 2025 under Section 232 of the 1962 Trade Expansion Act, a legal framework that allows the U.S. to impose trade barriers on imports deemed a threat to national security.
The proposal marks the final pillar of a long-running U.S. strategy that stretches back 14 years to reshape the global solar industry. Since 2012, successive U.S. administrations have deployed anti-dumping probes, escalating tariffs, and targeted tax incentives to gradually push Chinese solar manufacturers out of their home production bases and toward establishing operations in the United States. The new tariffs are explicitly designed to close the remaining loophole: forcing firms that have already built U.S. assembly plants to source raw polysilicon and core components domestically, creating a fully integrated solar supply chain within U.S. borders.
According to a Thursday Reuters report citing anonymous administration sources, the new restrictions will apply across the entire solar production chain, covering polysilicon, wafers, cells, modules, and finished solar panels. The 15% tariff will specifically target polysilicon derivatives, while binding price floors will set a minimum cost for all imported solar inputs.
Beijing has already issued fierce pushback against the measure. In a formal statement, the Chinese Embassy in Washington called on the U.S. to immediately abandon the Section 232 tariff plan and resolve trade disagreements through equal, constructive dialogue. “China firmly opposes the U.S. overstretching the concept of national security and abusing state power to unjustifiably suppress Chinese companies,” a embassy spokesperson said. “Protectionism will not enhance U.S. competitiveness. What the U.S. has done seriously impedes normal economic and trade exchanges between Chinese and American companies and serves the interests of no party, including American businesses and consumers. China will continue to firmly safeguard the lawful and legitimate rights and interests of Chinese companies.”
Chinese industry analysts and commentators have been equally critical, with many framing the sequence of shifting U.S. solar policies as a predatory “pig-butchering scam” — a term borrowed from a common online fraud scheme where scammers lure victims into investing before cutting off contact and seizing their assets. Critics argue the Biden administration first used generous federal tax credits under the 2022 Inflation Reduction Act to lure major Chinese solar manufacturers into investing billions of dollars to build new factories on U.S. soil, only for the subsequent Trump administration to abruptly slash those credits, tighten eligibility rules, and impose new tariffs that effectively trap Chinese firms into selling their assets at a loss.
This policy shift is codified in the One Big Beautiful Bill Act, signed into law by Trump on July 4, 2025. The legislation sets strict new rules for solar manufacturers to access federal tax credits: to lock in the full benefit, companies must have broken ground on their U.S. factories before July 4, 2026, with a four-year grace period to complete construction. It also enforces rising domestic content requirements: for modules to qualify for credits, 50% of components must be U.S.-sourced in 2026, rising to 60% in 2027, 70% in 2028, and 80% in 2029. Inverters follow a similar schedule, starting at 50% domestic content in 2026 and increasing 5 percentage points annually to 65% by 2029. Most notably, the act bars tax credits entirely for any U.S.-based entity that is classified as a Prohibited Foreign Entity, a designation that applies to any firm where Chinese, Russian, Iranian, or North Korean interests hold 25% or more equity, directly or indirectly.
Chinese industry experts warn the new measures will not deliver the domestic growth the U.S. is seeking, while raising costs for U.S. consumers and manufacturers. Huo Jianguo, vice chairperson of the China Society for World Trade Organization Studies, told state-affiliated newspaper the Global Times that the Trump administration has grossly overextended the national security justification for tariffs. He argued that rash protectionist moves disrupt global supply chains, fail to boost U.S. competitiveness, and harm the interests of all parties involved. Lu Jinbiao, a member of the expert committee at the China Photovoltaic Industry Association, added that the policy will do little to increase U.S. polysilicon production, but will significantly raise input costs for American solar manufacturers. He noted that the impact on major Chinese producers will be relatively limited, as most have already shifted their primary export focus to markets in India, Vietnam, and other Southeast Asian nations.
Still, many Chinese observers acknowledge that 14 years of escalating U.S. trade pressure has started to erode China’s dominant position in the global solar sector. A Shaanxi-based columnist writing under the pen name Clear Mind documented that since 2025, leading Chinese solar firms including Trina Solar, JinkoSolar, and Boviet Solar have been scaling back and exiting their newly built U.S. operations, with some facilities put up for sale just one week after starting production. While the physical production lines and equipment remain in place, high operating costs and lost tax credits have left the facilities unprofitable, forcing Chinese firms to sell at steep discounts. The core issue, Clear Mind explained, is the abrupt phase-out of tax credits: prior U.S. policy offered hundreds of millions of dollars in annual tax savings for large U.S.-based module plants, enough to offset the higher cost of domestic production, but the new 2025 legislation accelerated the phase-out and locked out most foreign-invested firms.
A timeline of 14 years of U.S. policy shows a deliberate incremental strategy to shift solar production away from China. After China joined the World Trade Organization in 2001, local government support helped Chinese solar firms rapidly expand, capturing 50% to 60% of global cell and module production by 2012. That same year, the Obama administration imposed the first round of anti-dumping tariffs on Chinese solar products, but a major regulatory loophole allowed Chinese firms to easily bypass the restrictions by routing production through third countries. In 2018, the first Trump administration imposed broader tariffs that forced most Chinese manufacturers to shift assembly operations to Southeast Asia. In 2022, the Biden administration passed the Inflation Reduction Act, which offered generous subsidies to encourage Chinese firms to relocate production to the U.S. By 2025, China still controlled 95% to 98% of global wafer production, 85% to 92% of global cell output, and 80% to 85% of global panel assembly. After returning to office, the second Trump administration rejected the Inflation Reduction Act as a waste of public funds, imposed new tariffs on panels made in Southeast Asia, and implemented the strict new construction deadline and domestic content rules in the One Big Beautiful Bill Act.
Guangdong-based commentator Tanshuo Renjian noted that U.S. trade enforcement has effectively chased Chinese producers across the globe over the past decade and a half. After U.S. tariffs pushed manufacturers out of Southeast Asia, many shifted production to Ethiopia, where solar exports to the U.S. surged from near zero to roughly $300 million in the second half of 2025 — only for the U.S. to extend anti-dumping investigations to the East African nation shortly after. Despite the persistent pressure, Tanshuo Renjian noted that Chinese firms have consistently adapted and found new pathways to operate.
The U.S. tariff announcement coincided with China’s implementation of new tightened exit-entry regulations, set to take effect September 15, which some outside commentators initially misinterpreted as a broad restriction on citizen travel. In reality, the new rules are specifically targeted at stemming the outflow of highly skilled engineers with expertise in advanced clean energy technologies, including cutting-edge N-type solar cell production. Under the new regulations, any individual deemed to pose a risk to China’s national industrial or technological security can be barred from exiting the country. Industry analysts note that the rules mean Chinese solar technicians who take jobs with U.S. solar firms could be barred from re-entering China after temporary trips home, effectively forcing them to leave their positions in the U.S.