US Solar Duties Threaten Malaysia's Role In Global Clean Energy Supply Chain - FMM

By Anas Abu Hassan

KUALA LUMPUR, April 23 (Bernama) -- The imposition of United States (US) duties on solar panels from Southeast Asia will have far-reaching implications on the manufacturing base across the region, according to the Federation of Malaysian Manufacturers (FMM).

FMM president Tan Sri Soh Thian Lai told Bernama that Malaysia, in particular, has long served as a key hub in the global solar supply chain, producing solar photovoltaic (PV) products, especially cells and modules for export to major markets like the US and Europe

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"This may disrupt production planning and force companies to reconsider ongoing or planned investments. 

"In some cases, factories may be compelled to suspend production, delay expansion plans, or relocate to avoid punitive cost pressures in the worst-case scenario.

"This poses serious implications for Malaysia’s standing as a clean energy manufacturing destination," Soh said.

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On Monday, the US government imposed new import duties on solar panels from Malaysia and three other countries, due to benefits from Chinese subsidies and unfair pricing.

According to Soh, the recent US decision is not a new tariff measure, but the outcome of an anti-dumping and countervailing duty investigation conducted under established US trade remedy laws.

"These duties are applied to specific companies based on findings of unfair pricing or subsidies, rather than being imposed as blanket tariffs on all imports from the region," he added.

Soh explained that Malaysia’s solar industry is significantly exposed to US trade action given its export dependence.

However, the extent of the impact depends on whether manufacturers participated in the investigation and cooperated with the US Department of Commerce.

"Companies that fully cooperated and provided the necessary documentation may receive a lower duty.

"In contrast, non-cooperating producers face the risk of being assigned the highest rates, reinforcing the critical importance of active participation in trade remedy processes to safeguard Malaysia’s interests and commercial viability," he added.

In addition, Soh suggested that the government strengthen Malaysia’s institutional framework for responding to trade remedy actions by establishing early warning mechanisms, coordinated legal advisory support, and joint representation strategies.

Meanwhile, Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said the impact on local Malaysian solar companies may not be that significant because solar panels are made mainly by Chinese companies that have invested in Malaysia.

"The impact is mainly on the Chinese companies, so they will probably have to move their production to more neutral countries where the tariff is low.

"Some Chinese companies that make solar panels have already wound up their production in Malaysia since last year because orders were already reducing," he said.

-- BERNAMA