U.S. Trade Enforcement and Solar Sector Risks: Implications for Emerging Market Renewables Firms

The U.S. solar sector is undergoing a seismic shift driven by aggressive trade enforcement actions, reshaping global supply chains and creating significant strategic risks for emerging market renewables firms. From 2023 to 2025, the Biden and Trump administrations implemented a cascade of antidumping and countervailing duty (AD/CVD) investigations, Section 232 investigations, and steep tariffs on solar components from Southeast Asia. These policies, while aimed at curbing Chinese circumvention and bolstering domestic manufacturing, have triggered a perfect storm of financial and operational challenges for firms in Vietnam, Thailand, Malaysia, and Cambodia—countries that supplied 80% of U.S. solar imports in 2024 Strategic tariffs delivering results for the American solar industry^[1].

Trade Enforcement Actions: A Double-Edged Sword

The U.S. Department of Commerce's AD/CVD investigations imposed tariffs ranging from 34% to 652% on solar cells and modules from Southeast Asia, leading to a near-total collapse in imports from these regions. For instance, Vietnam's solar cell exports to the U.S. plummeted by 91.5%, while Thailand's dropped by 90% Solar shock: How new tariffs could reshape US utility-scale deployment^[2]. These tariffs were justified as a response to allegations that Chinese manufacturers were using Southeast Asian factories to bypass prior U.S. trade restrictions. However, the retroactive duties ordered by the U.S. Court of International Trade on 2022–2024 imports added further financial uncertainty, penalizing firms that had already invested in these markets Trade court orders retroactive duties on solar panels imported back in 2022^[3].

Compounding these measures, the Trump administration's 10% baseline tariff in April 2025 and country-specific reciprocal tariffs—such as 3,500% on Cambodian products—have created a fragmented and volatile trade environment. Meanwhile, domestic content requirements under the Inflation Reduction Act (IRA) and restrictions on foreign entities of concern (FEOC) have further constrained supply chains, forcing firms to navigate a labyrinth of compliance costs and eligibility criteria for tax credits The US solar industry faces a perfect storm of Federal policy and trade challenges^[4].

Impact on Emerging Market Firms: Factory Closures and Strategic Pivots

The financial toll on emerging market solar firms has been severe. Companies like Jinko Solar, Trina Solar, and Boviet—many Chinese-owned but operating in Southeast Asia—have faced tariffs as high as 3,500%, leading to factory closures and mass layoffs. For example, Standard Energy Co.'s $300 million Thai facility shut down abruptly in 2025, displacing thousands of workers As Trump’s tariffs loom, Southeast Asia’s solar industry faces devastation^[5]. Thai solar exports alone, valued at $3.7 billion in 2023, have been decimated, with firms scrambling to pivot to alternative markets like India or Laos, where tariffs are lower or absent US wants to slap tariffs as high as 3,500% on solar panels from Southeast Asia^[6].

Despite these efforts, Southeast Asian firms face long-term challenges. Vietnam revised its national power development plan to target 73GW of solar capacity by 2030, while Malaysia and the Philippines are exploring domestic energy transitions to offset U.S. market losses U.S. trade uncertainty presents domestic opportunities for Southeast Asian renewables suppliers^[7]. However, grid constraints, curtailment risks, and the lack of medium-term policy commitments in these countries hinder their ability to fully absorb the shock of U.S. trade restrictions ASEAN’s clean power pathways: 2024 insights | Ember^[8].

Financial and Investment Trends: Capital Flight and Global Reallocations

The U.S. solar market's decline in 2025—marked by a 24% year-on-year drop in installations—has triggered a reallocation of capital. Investors are shifting focus to Europe, where renewable energy investments surged by 63% in H1 2025, and to emerging markets like India and the Middle East, which are projected to see 30%-50% annual solar demand growth Record Renewable Energy Investment in 2025: Three Things to Know^[9]. Meanwhile, global renewable energy investments hit $386 billion in 2025, with solar capturing $252 billion, though asset finance for utility-scale projects declined by 22% due to curtailment risks and negative power prices in regions like Spain and Brazil Solar Market Insight Report Q3 2025 - SEIA^[10].

For U.S. firms, the 45X tax credit under the IRA offers a lifeline, providing four cents per watt to solar cell manufacturers. However, uncertainty around the credit's future has stalled investments, with projects like a planned Minnesota solar cell plant put on hold Solar shock: How new tariffs could reshape US utility-scale deployment^[11]. This hesitancy underscores the broader challenge: while tariffs aim to protect domestic production, they also raise costs for developers, with solar cell prices rising by 150% and total project costs increasing by 15% Understanding the Impact of 2025 Tariffs on the U.S.^[12].

Strategic Risks for Clean Energy Investors

Investors must weigh several critical risks:
1. Supply Chain Fragility: Overreliance on U.S. trade policies creates exposure to sudden regulatory shifts. For example, the Trump administration's 2025 tariffs disrupted Southeast Asian firms, while the Biden-era 2022 tariff moratorium allowed Chinese manufacturers to flood the U.S. market Trump’s Tariffs May Dim Solar Sector’s Future As ...^[13].
2. Cost Volatility: Tariffs on steel, aluminum, and solar components have increased project costs, squeezing profit margins for developers and delaying deployments in states like Maryland, which aims for 52.5% renewable electricity by 2030 New tariffs may disrupt solar market and US projects^[14].
3. Policy Uncertainty: The expiration of IRA tax credits in 2035 and the potential for future U.S. trade actions create long-term unpredictability, deterring long-term capital commitments The 2025 Solar Industry Survey: Insights from the U.S. Market^[15].
4. Geopolitical Diversification: While Southeast Asian firms pivot to India and China, these markets come with their own risks, including geopolitical tensions and regulatory hurdles.

Conclusion: Navigating the New Normal

The U.S. solar sector's transformation highlights the need for investors to adopt a nuanced, diversified approach. While tariffs have curbed unfair trade practices and spurred domestic production, they have also created a high-risk environment for emerging market firms and U.S. developers alike. For investors, the path forward lies in hedging against policy volatility, supporting regional energy transitions in Southeast Asia and India, and prioritizing projects with long-term PPAs and stable regulatory frameworks. As the global solar market evolves, strategic agility—not just technological innovation—will determine success in this increasingly contested arena.