Why is the US lashing Malaysia over solar panels?

The US introduced import duties over solar panels from Malaysia, Cambodia, Thailand and Vietnam by claiming these countries benefitted from Chinese subsidies and unfair pricing practices.

This means Malaysia is facing a blanket import duty of 34.4 percent. Meanwhile the decision over reciprocal tariffs would be determined by the US International Trade Commission by June 2, reported The Malay Mail.

According to the Malaysia External Trade Development Corporation (Matrade), Malaysian solar product exports reached RM37.4 billion in 2024, with RM12.5 billion, or 33.4 per cent, shipped to the US.

The new tariffs follow a US investigation triggered by concerns from American solar firms about foreign competition impacting their market share. These measures aim to make imported solar panels more expensive, promoting domestic production instead.

The import duties and tariffs can disrupt foreign investments and job security.

Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai told Bernama that Malaysia’s role as a key hub in the global solar supply chain is at risk, with potential disruptions to production and investment plans.

“Factories may be compelled to suspend production, delay expansion, or relocate to avoid punitive cost pressures,” he said.

Industry player, Risen Energy Co entered the Malaysian market in 2021 with a planned RM42 billion investment over 15 years. However, these tariffs could force companies to reconsider such long-term commitments.

Several Chinese-owned solar panel manufacturers in Malaysia, including Jinko Solar Co, Risen Energy Co, and JA Solar Technology Co, which collectively represent nearly 40 per cent of Malaysia’s solar production capacity, faced significant challenges following last year’s tariff hikes.