Trump for 15% Tariff on Polysilicon (HS 2804.61) and Downstream to Protect Domestic Industry, US Capacity Falls to Near Zero after China Onslaught

[ABS News Service/07.08.2026]

The administration will impose a minimum import price for polysilicon, a key component for semiconductors and solar panels, as well as tariffs for products made with the material.

· New Proclamation Issued: On 6 August 2026, President Donald Trump signed a proclamation establishing a minimum import price for polysilicon and imposing a 15% tariff on polysilicon and products made from it.

· Effective Date: The new measures will come into effect in early December 2026.

· Minimum Import Price: Imports priced below the prescribed minimum price will not be allowed to enter the U.S. market, providing price protection for domestic manufacturers.

· Objective: The policy aims to:

o Revive U.S. polysilicon manufacturing.

o Protect domestic producers from unfair global competition.

o Build a secure domestic supply chain for critical materials.

· Investment Incentives: The proclamation directs Commerce Secretary Howard Lutnick to establish an incentive programme for companies that build or expand polysilicon manufacturing facilities in the United States.

· National Security Rationale: The administration classified domestic polysilicon production as critical for national security because it is an essential input for:

o Semiconductors

o Defence electronics

o Radar systems

o Communications equipment

o Missile and drone control systems

· Importance of Polysilicon: Polysilicon is a key raw material used in:

o Solar photovoltaic (PV) panels

o Semiconductor chips

o Electronic components

· China's Dominance:

o China produces around 90% of the world's polysilicon.

o The United States currently accounts for less than 2% of global production.

· Addressing Trade Circumvention: The administration said previous country-specific tariffs were frequently bypassed as Chinese manufacturers shifted production to countries such as:

o Ethiopia

o The Philippines

o Egypt

o Nigeria

o Other Southeast Asian and African countries

· Industry Support: U.S. solar manufacturers welcomed the move, arguing that a global tariff framework would prevent repeated circumvention of trade remedies.

· Part of Wider Trade Strategy: The new measures complement the Trump administration's broader tariff policy, which recently imposed tariffs on imports from more than 80 countries under Section 301.

· Legal Basis: Unlike the Section 301 tariffs, the polysilicon measures are imposed under Section 232 of the Trade Expansion Act, citing national security concerns.

· Existing U.S. Producers: The principal domestic polysilicon manufacturers are:

o Hemlock Semiconductor

o Wacker Chemie

· Current Industry Challenges:

o Most U.S.-assembled solar panels still rely on imported silicon wafers and photovoltaic cells.

o REC Silicon attempted to restart production in Washington State in 2024 but later closed the facility.

· Potential Impact:

o Strengthen domestic semiconductor and solar manufacturing.

o Reduce dependence on Chinese supply chains.

o Encourage new investment in U.S. production capacity.

o Increase costs for imported solar components, potentially raising solar installation costs in the short term.

· Overall Significance: The proclamation marks another major step in the Trump administration's industrial policy, combining tariffs, price controls and investment incentives to rebuild strategic domestic manufacturing while reducing reliance on Chinese critical material supply chains.

[ABS News Service/07.08.2026]

President Trump on Thursday (06.08.2026) signed a proclamation that would create a minimum price for imports of polysilicon and impose a 15 percent tariff on products made with the material, in an effort to support domestic production of a key component in semiconductors and solar panels.

The tariffs will go into effect in early December. By setting a minimum import price for polysilicon and products made with it, the administration will block any products priced below those levels from entering the U.S. market. That will allow U.S.-based manufacturers to sell their products at prices where they can be profitable. The administration said the move would help create a protected domestic market free from global distortions, and may be adjusted for countries that have trade agreements with the United States, the order said.

Mr. Trump also ordered Commerce Secretary Howard Lutnick to establish an incentive program for companies that build or expand factories to produce polysilicon or its derivatives in the United States.

The proclamation said that domestic polysilicon production was essential for national security because it is a key ingredient for semiconductors used in a variety of electronics and defense systems such as radar and communication systems as well as control systems for missiles and drones.

Polysilicon is a widely used raw material in solar photovoltaic panels as well as in semiconductors for computer chips and other electronics. The United States was once a world leader in production of the material, but China has since become the world’s dominant producer after funding domestic manufacturers. Today, China produces roughly 90 percent of the world’s supply, while the U.S. produces less than 2 percent.

While Mr. Trump’s order emphasized the importance of polysilicon for electronics and defense purposes, the solar industry is by far the biggest consumer of the material and some U.S. manufacturers of solar components have pushed for protections against Chinese imports.

U.S. solar manufacturers have repeatedly won trade cases against foreign competitors related to unfair subsidization and pricing, resulting in the U.S. government putting tariffs on solar panels and polysilicon from specific countries. But Chinese manufacturers, which dominate solar production, have quickly found ways to sidestep those rules by expanding globally and exporting to the United States from new countries that do not face restrictions.

The pattern has resulted in waves of exports and tariffs being imposed on China, Taiwan and Southeast Asia. In May, eight domestic solar companies filed a request for the government to investigate solar products assembled in Ethiopia with Chinese-origin components, saying the country had become the latest export platform to help circumvent U.S. tariffs.

The domestic companies said they had seen similar trends in the Philippines, the Middle East and countries in Africa, including Egypt and Nigeria. U.S. firms have complained that the country-based tariffs are inefficient and result in high legal expenses for American manufacturers.

Jon Toomey, the president of the Coalition for Prosperous America, a trade group that supported the tariffs, said the new global tariffs would “solve the endless game” of Whac-a-Mole that polysilicon and solar manufacturers had been fighting for decades.

“For the first time, the United States is protecting the entire solar supply chain with a single action,” he said.

The Trump administration has tried to use tariffs to build a protective wall around U.S. industries. Last month, it imposed duties on imports from more than 80 countries, in an effort to resurrect the tariffs that were struck down earlier this year by the Supreme Court. Those tariffs used a legal provision known as Section 301, which deals with unfair trade practices.

The polysilicon tariffs were issued under another national-security-related provision called Section 232, which the administration has also used to impose tariffs on foreign steel, aluminum, cars, copper and pharmaceuticals, among other products.

There are currently just two companies that produce polysilicon in the United States, Hemlock Semiconductor and Wacker Chemie. In 2024, REC Silicon attempted to restart polysilicon production in Moses Lake, Wash., but closed the facility later that year.

Although a large number of U.S.-based factories now assemble solar panel modules, many of the underlying components are still imported from abroad, including silicon wafers and photovoltaic cells. Last year, Republicans in Congress phased out tax credits rewarding solar developers that installed domestically made panels, but kept in place a credit to encourage U.S. solar factories.

While the new tariffs have the potential to increase the cost of installing solar power — which is currently the fastest-growing source of electricity in the United States — some solar manufacturers with U.S.-based operations, including Hanwha QCells and T1 Energy, praised the move.

“Today’s decision from the White House balances the reality of where America’s solar energy manufacturing is today while advancing our collective ambition to onshore the entire supply chain from polysilicon to finished panels in the U.S.,” Andy Park, global chief executive of Hanwha Qcells, a South Korean company that operates large solar manufacturing facilities in Georgia.