(Editor’s note: The story has been updated to include Wacker Chemie and Chinese Embassy’s statement and share moves of U.S. solar stocks)
President Donald Trump imposed a 15% tariff and minimum import price requirements on imported polysilicon on Thursday, targeting the raw material used in semiconductors and solar panels. China controls more than 90% of global polysilicon production.
The measures, introduced under Section 232 of the Trade Expansion Act, will take effect on Dec. 4.
Officials Frame Move as National Security Priority
The proclamation states the plan will help ensure the commercial viability of U.S. polysilicon production needed to meet economic and national security requirements.
Chips account for just 2.4% of global polysilicon demand, meaning solar’s larger appetite for the material effectively underwrites U.S. production capacity needed for chipmaking, according to the Semiconductor Industry Association.
The proclamation also allows the Commerce Department to establish an incentive program for companies that invest in factories producing polysilicon or related products.
In a statement to Benzinga, the Embassy of the People’s Republic of China in the USA said Washington is “overstretching the concept of national security” to target Chinese businesses, arguing protectionism will not make the U.S. more competitive. The embassy added that China will continue defending its businesses’ lawful rights.
Hemlock Semiconductor, a joint venture between Corning Inc. (NYSE:GLW) and Japan’s Shin-Etsu Handotai, operates the Michigan plant. Germany’s Wacker Chemie runs the Tennessee facility. Together, they operate the only two polysilicon plants in the United States.
In a statement to Benzinga, Wacker Chemie said it is “currently reviewing the 232 remedy to thoroughly understand its impact” on U.S. operations, which employ roughly 1,500 people.
The company added that it appreciates the administration’s continued engagement given the implications for semiconductor supply chain resilience, advanced computing infrastructure and broader U.S. defense and security interests.
Tim Brightbill, a trade attorney with Wiley Rein who has brought several trade cases against Chinese solar companies, warned that the delayed enforcement could trigger a surge of imports in the coming months, Reuters reported.
Mark Widmar, CEO of Phoenix-based solar technology company First Solar, Inc. (NASDAQ:FSLR), called the measure “one of the most strategically significant trade measures in decades.” He said the action includes a minimum import price, an ad valorem tariff, and enforcement measures aimed at closing loopholes used by China-linked supply chains.
How Markets Reacted
Shares of First Solar, Solaredge Technologies Inc (NASDAQ:SEDG), Sunrun Inc (NASDAQ:SUN) and Enphase Energy Inc (NASDAQ:ENPH) rose between 2.3% and 4.8% in premarket trading on Friday.
The announcement contrasts with Trump’s broader rollback of clean energy. A July report from the Minneapolis-based non-profit BlueGreen Alliance found that his policies led to the cancellation or delay of $82.8 billion in clean energy, manufacturing and electric vehicle projects across the country.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Photo courtesy: Joey Sussman on Shutterstock.com
