China's PV industry has been a "victim" of the US tariff policy. Therefore, when the Trump administration announced the imposition of "reciprocal tariffs" on US global trading partners, domestic PV industry insiders were almost "unfazed".

"For Chinese PV, high tariffs in the United States are not pressure, and it doesn't matter if you even withdraw from the U.S. market completely." Some people in the photovoltaic industry told the reporter of the 21st Century Business Herald that the key is not to lose money in order to compete for the US market.

In fact, the data shows that in recent years, under the siege of US trade policy, Chinese mainland has not directly exported photovoltaic products to the United States. In this context, Southeast Asia has become a "springboard" - Chinese PV companies have rushed to Thailand, Vietnam, Malaysia, Cambodia and other countries to build production capacity, and helped Southeast Asia's PV exports to the United States to rise rapidly in the past two years.

However, the impact of Trump's "reciprocal tariffs" has caused Southeast Asia to become the "hardest hit area" of high tariff shocks. As a result, the Southeast Asian photovoltaic supply chain is at a crossroads of whether to transfer.

In an interview with the 21st Century Business Herald, a number of leading photovoltaic companies said that the U.S. tariff policy once again reminded China's photovoltaic industry not to rely heavily on a single market. "The globalization of the supply chain is still a long-term solution."

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The tariff shock has been limited overall

"The company's module production capacity in the United States mainly imports raw materials from outside the United States, and from the perspective of the whole industry, the cost of the company's U.S. production capacity due to this round of 'reciprocity tariffs' is at a low level." On April 7, LONGi Green Energy (601012. SH) said in response to the impact of the "reciprocal tariffs" on the investor interactive platform that the company has built 5GW of module production capacity in the United States in the form of a joint venture, and all of it has been put into normal production.

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21st Century Business Herald reporter noticed that since the release of the news of "reciprocal tariffs", including LONGi Green Energy, a number of A-share photovoltaic companies have responded on the interactive platform for the first time.

The U.S. PV market is one of the most important regional markets in the world, due to its strong market demand and relatively complete energy infrastructure. However, in recent years, due to high trade barriers, it is difficult for Chinese mainland photovoltaic cells and modules to be directly exported to the United States, mainly by deploying overseas production capacity for sales.

The United States has suppressed China's photovoltaic product exports for a long time. The "Analysis and Suggestions on the Foreign Trade Situation of China's Photovoltaic Industry in 2024" issued by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products in March this year pointed out: "As early as 2011, the United States launched a 'double anti' investigation on our photovoltaic companies and imposed high tariffs, and then the United States repeatedly used '201, 301, 337, anti-circumvention' and other means to restrict imported photovoltaic products, aiming to accelerate the return of photovoltaic manufacturing to the local market." Therefore, the association believes that the current attitude of Chinese photovoltaic companies towards the US market is: "a cautious layout in a complex environment." ”

In an interview with the 21st Century Business Herald on April 9, LONGi Green Energy said that in terms of recent module sales prices, module prices in the U.S. market are significantly higher than those in other markets, "almost two or three times." ”

"The U.S. market is attractive, but it has complex geopolitical implications." The above-mentioned people believe that for domestic photovoltaic companies, "whether to deploy there or not, and how much resources to invest, need to be carefully evaluated." ”

The U.S. market is indeed a "love-hate" regional market for Chinese PV companies. According to data released by industry group InfoLink Consulting on April 9, the average price of N-type TOPCon modules in 182mm and 210mm sizes is US$0.26/W. During the same period, the average price in Europe and China was $0.09/W. The profit margin represented by such a spread is very "attractive". Trina Solar (688599. SH) 2023 regional gross margin data illustrates this - the company's gross profit margin in the US market for the year was 34.24%, which is three times and twice that of the Chinese and European markets in the same period.

"Up to now, the company has a sufficient scale of battery module inventory in the United States, and its cost is not expected to be affected by the reciprocal tariffs imposed by the United States, and some products that are about to enter customs in transit, plus some other supply channels, can meet the needs of the company's customers in the U.S. market in the later stages of this year." On April 7, Trina Solar said on its investor interactive platform that "this 'reciprocal tariff' may bring about a certain increase in product prices, which will have a positive impact on the profit of battery module inventory in the United States." ”

However, the company also believes that companies with stronger forward-looking strategic research and global business capabilities can relatively better respond to the "reciprocal tariffs" imposed by the United States on the world.

Supply chains are becoming more globalized

The biggest uncertainty brought to China's photovoltaic industry by the U.S. "reciprocity tariffs" is the future trend of manufacturing capacity in Southeast Asia. In fact, not only the photovoltaic supply chain, but also other semiconductors, electronics and other fields are also facing increased manufacturing costs due to tariffs.

However, it should be pointed out that high tariffs have not directly blocked the supply chain layout of Chinese PV companies in Southeast Asia.

The difference in tax rates in Southeast Asian countries makes some PV production capacity still have certain profit margins. For example, Trina Solar responded that its joint venture TOPCon cell module factory in Indonesia (currently with an annual production capacity of 1GW) is not affected by the "double reversal" of the four Southeast Asian countries, and the Indonesian tax rate is relatively low among the proposed new tax rates announced this time, and the Indonesian factory has a relative competitive advantage. Photovoltaic frame company Yongzhen Co., Ltd. (603381. SH) said that the U.S. "reciprocity tariff" policy currently has no impact on the company's Vietnam base, because the steel and aluminum and their derivatives, automobiles and parts that have been subject to the "232 tariff" are exempt from the levy.

Lv Jinbiao, deputy director of the silicon industry expert group of the China Nonferrous Metals Industry Association, pointed out in an interview with the 21st Century Business Herald reporter that "Southeast Asian countries still have some production capacity that can be produced." He also mentioned that Chinese PV companies have previously chosen to build factories in the United States in response to US trade barriers, "Chinese PV factories in the United States are not only considered whether they can receive IRA subsidies, but also political risks." ”

It is undeniable that in view of the current situation of the high gross profit market in the United States, the expansion of production in the United States in the short term may be an effective means for PV companies to cope with the current round of tariff shocks.

At present, China's leading photovoltaic companies have gradually formed a certain amount of experience in investing and building factories in the United States. There are joint ventures, such as LONGi Green Energy, which has established a 5GW photovoltaic module factory in Ohio through a joint venture with US energy giant Invenergy; There are also capital operations, such as Trina Solar's sale of a 5GW PV module factory in Texas to FREYR Battery.Inc, a U.S.-listed company, to promote the localization of the Trina brand by retaining technology and brand output, combined with FREYR Battery.Inc's management's U.S. market channels and industry experience and government relations with external consultants.

At the same time, the layout of emerging markets has become an important step for Chinese PV companies to accelerate the globalization of their supply chains.

"The company is actively paying attention to the progress of the U.S. tariffs, in order to cope with the increasingly severe risk of international trade frictions, the company has accelerated the globalization strategy, and actively promoted the global layout of production capacity on the basis of the global sales and service network system." JA Solar (002459. SZ) told the 21st Century Business Herald reporter that the company will launch the Oman project with an annual output of 6GW of high-efficiency solar cells and 3GW of high-power solar modules at the end of 2024, and strive to put it into production by the end of 2025.

"The rise of emerging markets has provided new market opportunities for China's photovoltaic enterprises, but the slowdown in global installed capacity growth and the fluctuation of some traditional market demand have also brought uncertainty to the foreign trade of China's photovoltaic industry, and enterprises need to pay more attention to market diversification and reduce market risks." China Chamber of Commerce for Import and Export of Machinery and Electronic Products analysis.