As Trump’s tariffs loom, Southeast Asia’s solar industry faces devastation

Bangkok, Thailand – A little substance connection informed Chonlada Siangkong that she had mislaid her occupation astatine a star compartment mill successful Rayong, eastbound Thailand.

The mill operated by Standard Energy Co, a subsidiary of Singaporean star compartment elephantine GSTAR, unopen its doors past period successful anticipation of United States President Donald Trump’s tariffs connected star sheet exports from Southeast Asia.

From Monday, US Customs and Border Protection volition statesman imposing tariffs ranging from 375 percent to much than 3,500 percent connected imports from Thailand, Cambodia, Vietnam and Malaysia.

The punishing duties, introduced successful effect to alleged unfair commercialized practices by Chinese-owned factories successful the region, person raised questions astir the continuing viability of Southeast Asia’s star export trade, the root of astir 80 percent of star products sold successful the US.

Like thousands of different workers successful Thailand and crossed the region, Chonlada, a 33-year-old mother of one, is abruptly facing a much precarious aboriginal amid the commercialized crackdown.

“We were each shocked. The adjacent day, they told america not to travel to enactment and would not wage for compensation,” Chonlada told Al Jazeera.

US officials accidental Chinese producers person utilized Southeast Asian countries to skirt tariffs connected China and “dump” inexpensive star panels successful the US market, harming their businesses.

US commercialized officials person named Jinko Solar, Trina Solar, Taihua New Energy Hounen, Sunshine Electrical Energy, Runergy and Boviet – each of which person large operations successful Thailand, Malaysia, Cambodia oregon Vietnam – arsenic the worst offenders.

Solar panels are pictured connected the extortion of a gathering successful Bangkok, Thailand, connected August 9, 2017 [Athit Perawongmetha/Reuters]

Thai star exports to the US were worthy much than $3.7bn successful 2023, conscionable down Vietnam astatine $3.9bn, according to the latest US commercialized data.

Standard Energy Co’s $300m installation successful Rayong had been successful cognition for little than a year, producing its archetypal star compartment to large fanfare successful August.

“I’m baffled by what’s conscionable happened,” Kanyawee, a accumulation enactment manager astatine Standard Energy who asked to beryllium referred to by his archetypal sanction only, told Al Jazeera.

“New machines person conscionable landed and we hardly utilized them, they’re precise costly excessively – a fewer cardinal baht for each machine. They’ve besides ordered tonnes of earthy materials waiting to beryllium produced.”

Ben McCarron, managing manager of the hazard consultancy Asia Research & Engagement, said Southeast Asian manufacturers are facing a superior deed from the US crook towards protectionism.

“There are suggestions that manufacturing mightiness exit Southeast Asia wholly if tariffs are introduced either successful a broad way, oregon that specifically code Chinese-owned manufacturing capableness successful the region,” McCarron told Al Jazeera.

“The implications are important for these countries; Thailand, Vietnam, Cambodia, and Malaysia accounted for astir 80 percent of the US’s star imports successful 2024,” McCarron said, adding that “some manufacturers person already begun shutting down and moving retired of the region”.

Unfair advantage

US officials and businesses person accused China of giving its star firms an unfair marketplace vantage with subsidies.

China was the largest funder of cleanable vigor successful Southeast Asia betwixt 2013 and 2023, pouring $2.7bn into projects successful Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, according to Zero Carbon Analytics.

The American Alliance for Solar Manufacturing Trade Committee, a conjugation of 7 manufacture players, was among the loudest voices to lobby for a crisp emergence successful levies connected Chinese imports.

Without a reprieve from the notoriously unpredictable Trump, companies affected by the tariffs person small recourse isolated from the quality to record an entreaty erstwhile a year, oregon aft 5 years, erstwhile a “sunset review” clause takes effect.

Some observers judge the assemblage whitethorn ne'er recover.

“It’s not conscionable the low-skilled labour that was affected by the commercialized war; galore workers successful the star compartment proviso concatenation are technicians, skilled labourers,” Tara Buakamsri, an advisor to environmental organisation Greenpeace, told Al Jazeera.

“Even if you marque a batch of savings, star compartment exporters would inactive request to chopped down connected these skilled workers.”

Others instrumentality a more bullish view, arguing that, erstwhile the particulate has settled, Chinese star firms volition thrust the proviso of products needed to meet regional emissions targets.

While Thailand, Cambodia, Malaysia and Vietnam welcomed Chinese star companies successful portion owed to the ample sums of up-front concern connected offer, they are each besides seeking to conscionable much of their vigor needs with cleaner sources.

Before Trump entered bureau with his tariff agenda, Thailand had announced plans to go c neutral by 2050 and nutrient net-zero greenhouse state emissions by 2065.

Employees of a star workplace institution instrumentality notes successful Nakhon Ratchasima province, Thailand, connected October 3, 2013 [Athit Perawongmetha/Reuters]

“A slowdown [or halt] successful star exports arsenic a effect of US tariffs whitethorn supercharge efforts successful Southeast Asian markets by Chinese star companies, which spot the portion arsenic a captious and well-aligned destination for greenish technologies,” McCarron said.

“Leftover proviso from slowing exports could beryllium absorbed by home markets successful Thailand, Malaysia, Cambodia, Vietnam, peculiarly if governments usage the concern arsenic a cost-effective accidental to rapidly accelerate argumentation initiatives that stimulate home solar.”

For Southeast Asia’s star companies, endurance is besides apt to beryllium connected governments cutting reddish portion and loosening the power of lipid and state monopolies implicit the vigor mix.

At the aforesaid time, the US’s exclusion of Southeast Asian star imports could hamper the displacement towards greener vigor successful the world’s apical economy.

“Thailand’s star compartment accumulation is heavy export-driven and the US has historically been a large export destination,” Pavida Pananond, a prof of planetary concern astatine Thammasat Business School successful Bangkok, told Al Jazeera.

But star tariffs volition “also wounded American consumers and the greenish modulation successful the US arsenic prices go higher”.