Trump administration to impose 15% tariff and price floors on Polysilicon to counter China's market dominance

The Trump administration is preparing to announce a 15% tariff and minimum import price floors on polysilicon products as early as August 6, 2026. Initiated under Section 232 of the Trade Expansion Act of 1962, the hybrid trade protection mechanism aims to counter China's overwhelming dominance, which reached 93.5% of global output in 2024. The policy seeks to protect the thin United States domestic manufacturing base, led by Hemlock Semiconductor and Wacker Chemie, though industry experts warn the measures could raise costs for solar developers and chip manufacturers.

Polysilicon price floor mechanism

• ▪The Trump administration will announce as soon as August 6, 2026, a 15% tariff and a series of price floors on products made from polysilicon.
• ▪The proposed policy includes provisions allowing importers who invest in domestic United States silicon wafer and solar cell production capacity to offset some cost burdens.
• ▪The proposed trade policy combines a minimum import price constraint with tariffs to establish a hybrid trade protection mechanism.

China's global production dominance

• ▪The top four Chinese polysilicon producers—Tongwei, GCL Technology, Daqo New Energy, and Xinte Energy—together held 65% of global output in 2024.
• ▪China accounts for approximately 80% of global solar manufacturing capacity.
• ▪The Chinese polysilicon industry reached 93.5% of global output in 2024, with nine of the world's ten largest producers based in China.

US domestic producer capacity

• ▪The United States domestic solar manufacturing industry remains heavily reliant on imported upstream silicon wafers and solar cells.
• ▪Hemlock Semiconductor in Michigan and Wacker Chemie in Tennessee represent the primary active domestic United States polysilicon producers.
• ▪REC Silicon ceased polysilicon production at its Moses Lake, Washington facility after failed attempts to achieve semiconductor-grade purity.

Electricity cost production advantage

• ▪Chinese facilities in Sichuan province access electricity at roughly $0.02 per kilowatt-hour during the rainy season, which is one-quarter to one-fifth the industrial rate paid in the United States.
• ▪Polysilicon production via the Siemens process requires 50 to 100 kilowatt-hours of electricity per kilogram of material produced.

Section 232 investigation process

• ▪Section 232 of the Trade Expansion Act of 1962 authorizes the United States President to restrict imports deemed a threat to national security.
• ▪The United States Department of Commerce Bureau of Industry and Security launched a Section 232 national security investigation into polysilicon imports on July 14, 2025.

Chinese capacity consolidation strategy

• ▪Beijing extended anti-dumping duties of 53.3% to 57% on solar-grade polysilicon imported from the United States for five years starting January 14, 2026.
• ▪Six of China's largest polysilicon producers discussed creating a 50 billion yuan fund to acquire and permanently shut down roughly one-third of China's existing capacity.