US Weighs Polysilicon Price Floor to Counter China’s Solar Dominance
The Trump administration is preparing to set a minimum import price for a single commodity—polysilicon—in a bid to weaken China’s near-total grip on the material that underpins both artificial intelligence chips and solar panels, according to a Reuters report citing four people familiar with the plans.
The measures, expected later this month, would follow a roughly year-long national security investigation under Section 232 of the Trade Expansion Act of 1962. If approved, the policy would place polysilicon alongside steel, aluminum, autos, and other industries that have already faced trade restrictions under the administration.
China currently accounts for more than 80% of manufacturing capacity across the major stages of solar-panel production, according to the International Energy Agency. Industry figures cited in coverage of the proposed policy put China’s share of global polysilicon output at 93.5% in 2024, with nine of the world’s top 10 producers based there. Solar-grade polysilicon prices fell from roughly $39 per kilogram in 2022 to below $4.50 by late 2024 as global capacity outpaced demand.
“China built its polysilicon dominance through subsidies and chronic overcapacity that pushed prices below sustainable levels and weakened competitors. A price floor paired with tariffs could give US producers room to survive, but the policy needs careful calibration so trusted inputs remain available while domestic wafer and cell capacity catches up,” Craig Singleton, senior China fellow at the Foundation for Defense of Democracies, told Reuters.
The Chinese government has already pushed back against the expected proclamation. “China urges the US to stop the Section 232 tariff measures as soon as possible, and properly resolve the concerns of all parties through equal dialogue,” a spokesperson for China’s Embassy in Washington told Reuters.
Meanwhile, solar and materials stocks rose after the news. Corning jumped as much as 10%, First Solar climbed 8%, and SolarEdge Technologies advanced 8%. The companies do not have identical exposure: First Solar is a US solar-module manufacturer, SolarEdge is an Israeli-headquartered solar-technology company, and Corning is a US materials and glass manufacturer.
Tradeoff economics: Solar developers vs. chip fabs
The dual-use nature of polysilicon puts the White House in a delicate spot. While the chip industry consumes just 2.4% of global polysilicon by volume, according to Reuters, it relies on demand from the much larger solar sector to help sustain high-purity domestic production.
“Without polysilicon, the next steps of the value chain—wafer and chips or wafer and solar cells—are not possible,” Wacker Chemie said in a statement cited by Reuters.
However, enforcing a high price floor could inflict collateral damage on utility-scale solar developers. Roth Capital Partners managing director Phil Shen estimated that Section 232 measures could add roughly $0.10 per watt to imported solar cells, raising power purchase agreement prices for utilities and increasing construction costs for clean energy projects that power data centers. The analysis was produced before the final scope and rates of any policy were known.
The subsidized energy paradox
The limitation of relying solely on protective tariffs is that they cannot eliminate the underlying differences in production and electricity costs. The Siemens process used to refine metallurgical silicon into ultra-pure polysilicon is energy-intensive, according to Tech Times. Although its exact electricity requirements vary by facility, technology, and product grade.
Chinese producers have benefited from state support, enormous production scale, clustered supply chains, and comparatively inexpensive electricity in some regions. The IEA has also found that much of China’s solar manufacturing has historically relied on coal-heavy grids with favorable industrial tariffs, complicating a simple comparison between Chinese hydropower and standard US grid rates.
Trade barriers could temporarily shield Hemlock Semiconductor and Wacker Chemie inside the American market, but they would not by themselves reduce US electricity or production costs. Consequently, US producers could remain at a disadvantage in some international export markets, particularly for price-sensitive solar-grade material.
American buyers could also face higher domestic energy-transition costs, depending on the price floor, tariff structure, country exemptions, and range of derivative products covered. Those details will determine whether the policy primarily strengthens a vulnerable US supply chain or shifts substantially higher costs onto the solar projects expected to help power the country’s AI expansion.
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