US Imposes 15% Additional Tariff on Derivatives of Key Semiconductor and Solar Materials

U.S. President Donald Trump signed a proclamation on August 6 (local time) establishing a Minimum Import Price (MIP) to prevent dumping and imposing a 15 percent additional tariff on polysilicon and polysilicon derivatives, which are core materials for semiconductors and solar panels.

The proclamation, which takes effect on December 4, is expected to impact South Korean companies that export polysilicon and its derivatives to the U.S. or those establishing and producing goods in factories within the United States.

President Trump stated in the proclamation that day, "I determine that it is necessary and appropriate to impose a 15 percent tariff on imports of polysilicon derivatives so that they do not threaten to impair the national security of the United States."

The administration also applied an MIP to polysilicon and its derivatives.

An MIP is a price floor that prevents products from being imported into the U.S. below that specified price.

Setting a minimum import price is interpreted as a measure to prevent dumping of low-priced imports centered around countries like China and to protect the domestic production base in the U.S.

The U.S. set the MIP for polysilicon at $21 per kilogram.

For polysilicon ingots (cylindrical blocks of polysilicon) and wafers, it was set at $100 per kilogram.

The MIP was set at $0.22 per watt for solar cells and $0.38 per watt for solar modules.

The proclamation also specifies that "a 15 percent additional tariff is imposed on imports of polysilicon ingots and polysilicon derivatives," and that the "minimum price system and 15 percent additional tariff" are applied "in addition to any other duties, taxes, fees, exactions, and charges applicable to such goods."

This is interpreted to mean that polysilicon derivatives produced in China or certain Southeast Asian countries designated as China's transshipment routes will face an additional 15 percent tariff on top of the high tariff rates previously imposed by the U.S. government.

South Korea, along with Japan, Taiwan, Switzerland, Liechtenstein, and European Union (EU) member states, will be subject to the 15 percent tariff, while the United Kingdom will be subject to a 10 percent tariff.

This action is taken under Section 232 of the Trade Expansion Act, which grants the president the authority to restrict imports through appropriate measures such as tariffs if it is determined that the import of a specific item threatens national security.

The U.S. Department of Commerce initiated the Section 232 investigation into polysilicon in July of last year, and today's proclamation is the result.

President Trump stated, "Polysilicon is a foundational material that underpins the security of the U.S. semiconductor and solar power supply chains," adding that this measure is aimed at rebuilding the U.S. polysilicon industry.

In fact, the production capacity for polysilicon and its derivatives in the United States has declined significantly.

President Trump pointed out in the proclamation that "the U.S. share of global polysilicon production capacity dropped from 50 percent in 2005 to less than 2 percent in 2024."

He added that the U.S. share of semiconductor wafer manufacturing decreased from 37 percent in 1990 to 10 percent in 2024, and that the solar sector relies entirely on imports for solar ingots, wafers, and cells.

The measure will take effect 120 days after Eastern Time, at 12:01 AM on December 4.

The four-month delay in the actual effective date appears to involve various strategic considerations.

U.S. political media outlet Politico noted that the timing comes "after the November midterm elections and the U.S.-China summit between President Trump and Chinese President Xi Jinping scheduled for September, at a time when the Trump administration is grappling with voter dissatisfaction over inflation and loose trade negotiations with China."

Additionally, the proclamation grants the U.S. Secretary of Commerce the authority to establish a program to incentivize investments in the production of polysilicon raw materials as well as ingots, wafers, and cells within the United States.

This means that companies building polysilicon-related manufacturing facilities in the U.S. will be permitted to import without the tariff burdens resulting from this measure.

In this regard, the proclamation attaches conditions requiring companies to make commitments to build, renovate, or expand facilities to produce products within the United States, and to begin construction by January 20, 2029.

Accordingly, polysilicon-related companies that have investment plans in the U.S. or have already invested in production facilities are expected to engage in multifaceted contacts with the U.S. Department of Commerce for tariff exemptions during the four-month period before the tariff measures actually take effect.

Attention is also focused on how South Korean companies will be affected by this measure.

Immediately after the Section 232 investigation was launched last year, the South Korean government cited Hanwha Qcells' investment in a solar panel production facility in Georgia and OCI's investment in a solar cell production facility in Texas, requesting that South Korean companies contributing to the U.S. supply chain diversification strategy be excluded from import restriction measures such as tariffs.

For now, Hanwha Qcells welcomed the measure.

Andy Park, Global CEO of Hanwha Qcells, told The New York Times (NYT), "Today's White House decision reflects the reality of U.S. solar energy manufacturing while achieving a balance in advancing our shared goal of bringing the entire supply chain, from polysilicon to finished panels, back to the United States."

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.