US 'Southeast Asia Tariff Circumvention'... Chinese Solar Companies Contemplate Withdrawal

As the United States moves to block the 'tariff loophole' exploited by Chinese solar equipment companies expanding into Southeast Asia, Chinese firms are reportedly contemplating whether to withdraw or remain.

According to the Hong Kong South China Morning Post (SCMP) on the 9th, with the expiration of the US anti-dumping tariff exemption, Chinese companies operating production facilities in Cambodia, Malaysia, Thailand, and Vietnam are dismantling their production sites. Regarding this production adjustment, companies such as Longi and Trina Solar explained that it was due to factory upgrades and regular maintenance.

Southeast Asia had been an active region for Chinese investment thanks to low production costs and geographical accessibility. However, changes in US policy have made 'circumventing exports' difficult. Longi founder Li Zhenguo recently stated in an interview with Chinese media that he is considering whether to close the Southeast Asian factories or keep them as backups.

Interior view of a solar panel manufacturing plant located in Jiangsu Province, China [Image source=AFP·Yonhap News]

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Chinese companies are accelerating the construction of new factories in the United States. JinkoSolar has built a 2GW factory in the US and has applied to the US government for financial support for locally produced solar products. The Middle East is also emerging as a new alternative market for Chinese companies, according to SCMP.

Professor Qing Tailong of Hong Kong Chinese University pointed out, "US pressure will continue," emphasizing the importance for Chinese companies to seek alternative markets such as the Middle East.

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