New US tariffs sad news for Malaysian solar panel exporters

New US tariffs sad news for Malaysian solar panel exportersMalaysia as the largest photovoltaic (PV) exporter to the US internationally with a market share of 30 per cent of PV imports is likely to feel a strong impact from US President Donald Trump’s move to slap import tariffs on PV cells and modules for four years after the respective regulation comes into force.

On January 22, the US government announced that it would impose safeguard tariffs on imports of PV cells and modules, starting at a rate of 30 per cent in the first year, before lowering them to 25 per cent in year two, 20 per cent in year three and 15 per cent in year four.

The move comes in response to petitions against unfair trade practices linked to China, which is said to subsidise its PV manufacturers and enable them to ship cheap products to the US.

However, Malaysia now seems to have to bear the brunt because the country has emerged as the largest exporter of PV cells and modules to the US, benefiting from the fall in China’s import market share from a peak of 59 per cent in 2011 to 21 per cent in 2016 after the US imposed anti-dumping and countervailing duties in 2012.

According to CIMB Economic Research, PV exports to the US accounted for 1.1 per cent of Malaysia’s total exports in 2016.

“A complete halt in PV exports to the US is unlikely, but tariffs may erode Malaysia’s market share and margins and disincentivise relocation of foreign PV firms to our shores,” it said.

CIMB Research said while the tariffs will increase the prices of imported PV cells and modules in the US, global PV prices have been declining in recent years and are expected to fall a further ten per cent in 2018 amid global excess capacity, lowering the net cost hikes for US buyers to 20 per cent this year.

The impact on demand may be less pronounced if US solar installation companies partially absorb the incremental cost. Nonetheless, the equalisation of selling prices between US and foreign PV suppliers may result in an erosion of the latter’s market share, if the heavily-consolidated US-based PV manufacturers have spare capacity.

The US import tariffs also could reduce Malaysia’s attractiveness to foreign companies, including Chinese, which dominate the domestic PV sector, by creating incentives to relocate production to the US in order to bypass the tariffs.



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Malaysia as the largest photovoltaic (PV) exporter to the US internationally with a market share of 30 per cent of PV imports is likely to feel a strong impact from US President Donald Trump’s move to slap import tariffs on PV cells and modules for four years after the respective regulation comes into force. On January 22, the US government announced that it would impose safeguard tariffs on imports of PV cells and modules, starting at a rate of 30 per cent in the first year, before lowering them to 25 per cent in year two, 20 per cent in...

New US tariffs sad news for Malaysian solar panel exportersMalaysia as the largest photovoltaic (PV) exporter to the US internationally with a market share of 30 per cent of PV imports is likely to feel a strong impact from US President Donald Trump’s move to slap import tariffs on PV cells and modules for four years after the respective regulation comes into force.

On January 22, the US government announced that it would impose safeguard tariffs on imports of PV cells and modules, starting at a rate of 30 per cent in the first year, before lowering them to 25 per cent in year two, 20 per cent in year three and 15 per cent in year four.

The move comes in response to petitions against unfair trade practices linked to China, which is said to subsidise its PV manufacturers and enable them to ship cheap products to the US.

However, Malaysia now seems to have to bear the brunt because the country has emerged as the largest exporter of PV cells and modules to the US, benefiting from the fall in China’s import market share from a peak of 59 per cent in 2011 to 21 per cent in 2016 after the US imposed anti-dumping and countervailing duties in 2012.

According to CIMB Economic Research, PV exports to the US accounted for 1.1 per cent of Malaysia’s total exports in 2016.

“A complete halt in PV exports to the US is unlikely, but tariffs may erode Malaysia’s market share and margins and disincentivise relocation of foreign PV firms to our shores,” it said.

CIMB Research said while the tariffs will increase the prices of imported PV cells and modules in the US, global PV prices have been declining in recent years and are expected to fall a further ten per cent in 2018 amid global excess capacity, lowering the net cost hikes for US buyers to 20 per cent this year.

The impact on demand may be less pronounced if US solar installation companies partially absorb the incremental cost. Nonetheless, the equalisation of selling prices between US and foreign PV suppliers may result in an erosion of the latter’s market share, if the heavily-consolidated US-based PV manufacturers have spare capacity.

The US import tariffs also could reduce Malaysia’s attractiveness to foreign companies, including Chinese, which dominate the domestic PV sector, by creating incentives to relocate production to the US in order to bypass the tariffs.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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