U.S. President Donald Trump signed an executive order on Thursday imposing a 15% tariff on imported polysilicon, a key material in semiconductor and solar panel production. The tariff will take effect on December 4 and aims to bolster U.S. supply chains amid rising competition from China, which dominates polysilicon production. The order also establishes minimum import prices for polysilicon and related products, following a national security investigation into foreign production.
Key Details
Trump stated that the measures are designed to protect American manufacturers, who have seen their share of global polysilicon production drop from 50% in 2005 to less than 2% in 2024. "For decades, we have allowed foreign firms to weaken United States producers in the polysilicon sector," he said. The order is expected to benefit U.S. companies such as Hemlock Semiconductor and Wacker Chemie, the main domestic producers of polysilicon.
Background
China's Ministry of Foreign Affairs criticized the tariff, claiming it disrupts normal trade relations and accusing the U.S. of abusing state power against Chinese businesses. A spokesperson stated, "Protectionism will not make the U.S. more competitive," emphasizing that China will protect its companies' rights. This move is part of a broader strategy by the U.S. to enhance its competitiveness in artificial intelligence and energy sectors.
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The new tariff is likely to increase costs for solar panel and semiconductor manufacturers, potentially affecting related sectors and leading to higher prices for consumers. Investors will watch for further developments in U.S.-China trade relations, particularly any retaliatory measures from Beijing. Watch for the implementation of the tariff in December and any subsequent responses from China.
Based on reporting by: theguardian.com, bbc.co.uk