Trump’s arrival in Casablanca has caused a stir in many areas. Being more specific, the electoral promises on tariffs on imported products have generated a lot of uncertainty and more so in the renewable energy sector. Furthermore, with the election of oil executive Chris Wright, concern is increasing around the clean energy sector. And the country most affected in this whole situation by the production of solar panels is China, but it has found a way to avoid the tariffs.
China and solar panels. If there is an undisputed leader in the solar energy sector, it is China. Its participation in each stage of the solar panel manufacturing chain exceeds 80%. However, despite its leadership position, 1% of the solar panels exported by the Asian country are destined for the United States, due to antidumping measures and tariffs that have existed for more than a decade.
However, China was not going to sit idly by and, faced with the clean energy boom, it restructured its supply chains.
Avoiding tariffs. China has found a way to avoid tariffs, it only had to move part of its production to other countries such as Cambodia, Malaysia, Thailand and Vietnam. In fact, one of the largest manufacturers, Longi has expanded its operations in the mentioned countries and this growth is due to a diversification of its supply chains and minimizing the impact of trade barriers.
Despite efforts to avoid tariffs, the US Department of Commerce was on the trail and last year noted that some Chinese companies were using these facilities in Southeast Asia to evade tariffs through the use of illegal practices. such as the re-export of solar panels. So measures now focus on imposing anti-dumping measures and more tariffs, but China has found even more shortcuts.
The opening to the Middle East. The Chinese industry has redirected its operations towards the Gulf Cooperation Council, which includes countries such as Saudi Arabia and the United Arab Emirates. This strategy of China to protect its tariffs from US taxes leads it to explore other areas such as the Middle East.
China is making every effort to avoid facing US tariffs and Donald Trump’s new mandate has caused uncertainty about the future of renewables in the United States. However, China continues to intensify its global efforts through the Belt and Road Initiative, which seeks to connect economies through infrastructure projects, now more focused on renewable energy in areas of Central Asia and Africa.
One more way to continue diversifying the market and reflecting a continuous adjustment of Chinese policies against trade barriers and not depending exclusively on the United States.
Image | Unsplash and Unsplash
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