New US solar tariffs unlikely to hurt Malaysia, says trade group

 The solar industry association says the factories that will be affected are mostly Chinese-owned, which export to the US.

A Malaysian solar industry trade group says it is Chinese-owned factories that export to the US which will be affected by a new round of US tariffs. (Envato Elements pic)

PETALING JAYA:

 The Malaysian solar industry will not be affected by the latest US tariffs on solar panels made in Southeast Asia, says an industry group.

The factories in Malaysia that are affected by US tariffs and duties are mostly Chinese-owned, with the panels built specifically for the US market, says Davis Chong, president of the Malaysian Photovoltaic Industry Association.

“They don’t sell their panels in Malaysia; instead, they ship everything to the US,” he told FMT.

He said Malaysian firms usually buy panels directly from China, where the prices are lower due to oversupply. “So it’s business as usual for our Malaysian companies. There will be no impact at all,” he said.

However, Chong said that previous rounds of US tariffs had “killed off” solar manufacturing in Malaysia, which is largely dominated by Chinese firms.

Chong said the higher costs and thin profit margins have made it unfeasible for Chinese manufacturers to continue operating in Malaysia, and their winding down could lead to more than 5,000 assembly line staff, engineers, and warehouse personnel retrenched.

The US imposed a blanket tariff of 9% on solar cell imports from Malaysia on Oct 1 last year, with five companies hit with duties ranging between 3.4% and 123.94%.

This included two Chinese-backed firms which manufacture in Malaysia: JinkoSolar Holding Co Ltd (3.47%) and Baojia New Energy (123.94%).

Earlier, Chinese-backed manufacturers like Longi, Risen Energy and JA Solar had already stopped expansion or cut back on production in Malaysia.

“We believe these manufacturing factories have been shutting down in the region and gradually relocating to non-Southeast Asia countries,” said Chong.

“Hence, the additional US duties will have no further impact on Malaysia’s solar manufacturing industry.”

On Monday, the US imposed new import duties on solar panels from Malaysia, Vietnam, Cambodia and Thailand after claiming that certain companies had gained from Chinese subsidies and engaged in unfair pricing practices.

Cambodian companies faced duties of up to 3,521%, Vietnam 395.9%, Thailand 375.2%, while Malaysia saw a countrywide rate of 34.4%.

Malaysia exported RM37 billion worth of solar products in 2024, with RM12.5 billion (33.4%) going to the US. - FMT