U.S. Tariff Proposal of Up to 3,521% on Southeast Asian Solar Imports Sparks Stock Surge

Solar stocks surged Tuesday after the U.S. Department of Commerce announced aggressive new tariffs on solar panel imports from four Southeast Asian countries—Cambodia, Malaysia, Thailand, and Vietnam—alleging unfair trade practices linked to Chinese firms.

The tariffs, which could reach a staggering 3,521% for some exporters, were the result of a yearlong investigation into allegations that Chinese solar manufacturers were skirting existing trade duties by routing products through Southeast Asia. The move has reignited debate around solar trade policy, American energy independence, and the role of China in the global clean energy market.

Market Reaction: Solar Shares Soar

The immediate market response was bullish. Shares of First Solar (FSLR), one of the few U.S.-based solar panel manufacturers, jumped over 9%. Sunnova Energy (NOVA) saw gains north of 12%, while other companies such as SolarEdge Technologies (SEDG), Array Technologies (ARRY), and Enphase Energy (ENPH) also posted solid gains. The Invesco Solar ETF (TAN), a broad measure of the sector, rose more than 4.5% during the trading session.

The rally reflects investor optimism that domestic solar manufacturers will benefit from the tariffs by facing less pricing pressure from cheaper imports. Still, the longer-term impact on the sector remains uncertain as companies navigate supply chain disruptions, cost volatility, and a shifting political landscape.

Behind the Tariffs: U.S. vs. China by Proxy

The Department of Commerce’s move follows mounting pressure from the American Alliance for Solar Manufacturing, a coalition of U.S.-based producers who argue that Chinese companies are distorting the global solar market by offshoring production to Southeast Asia while benefiting from state subsidies.

“This is a decisive victory for American manufacturing,” said Tim Brightbill, co-chair of international trade at Wiley Rein LLP, which represents the alliance. “Chinese-headquartered solar companies have been cheating the system, undercutting U.S. companies, and costing American workers their livelihoods.”

The Commerce Department concluded that solar products from Southeast Asia—especially Cambodia and Vietnam—were being “dumped” into the U.S. market at unfairly low prices, often thanks to Chinese government support. Cambodia’s tariffs topped out at an astonishing 3,521% due to non-cooperation during the investigation. Vietnam’s duties could reach 813%, with Malaysia and Thailand also facing substantial levies.

Not Final Yet: ITC Vote Pending

Before the tariffs take full effect, the U.S. International Trade Commission (ITC) must determine whether the subsidized imports materially harmed the domestic solar industry. That decision is expected by June 2. If the ITC votes in favor, the Commerce Department can move ahead with the tariffs.

This decision will be closely watched. A negative ruling could halt the duties, while a positive one could dramatically reshape the global supply chain for solar components entering the U.S.

Strategic Shifts Underway

Several solar companies, sensing the direction of U.S. trade policy, have already begun repositioning. California-based Enphase Energy said earlier this year it’s moving its battery cell manufacturing operations out of China to avoid tariff exposure. Meanwhile, First Solar expanded its domestic production footprint in 2024, opening a new thin-film panel plant in Alabama, adding to its existing sites in Ohio and Louisiana.

These moves were initially spurred by incentives from the Inflation Reduction Act under President Biden, but they now appear prescient given the Trump administration’s renewed protectionist stance.

Political Winds and Sector Volatility

While Tuesday’s rally brought welcome relief to solar investors, the broader outlook remains complex. Since President Trump’s return to office in January, the administration has doubled down on fossil fuels while scaling back green energy rhetoric. This shift has injected volatility into the sector, which is also grappling with high interest rates that have made financing solar projects more expensive for both homeowners and utilities.

The Invesco Solar ETF may have jumped Tuesday, but it's still down more than 13% in 2025 and has dropped over 27% in the past year. Analysts say the latest tariffs may provide a temporary boost for U.S. manufacturers, but long-term growth will depend on more stable policy, cost competitiveness, and global collaboration in clean energy development.

Bottom Line:
The Commerce Department’s sweeping new tariffs are a bold escalation in the solar trade war, positioning American manufacturers to benefit in the short term. But with a divided policy landscape and global supply chain realignments ahead, solar’s future is anything but clear.