(Bloomberg) — Chinese solar companies are halting production at factories in Southeast Asia as toughening U.S. trade barriers create uncertainty for exports from the region.
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Longyi Green Energy Technology Co. Ltd. began gradually winding down activity at its Malaysian factory this week after shutting down all five production lines at its Vietnam facility last week, Chinese industry newspaper Arfcg.com reported Tuesday, citing anonymous sources. Trina Solar Co. Ltd. has halted production at its Thailand factory, Sina Finance reported Wednesday, citing anonymous sources.
A LONGi spokesman said the company had “adjusted” production plans at several factories to address plummeting prices and changes in trade policies since the beginning of the year. Trina did not immediately respond to an emailed request for comment.
Chinese solar companies are trying to recover even as a wave of new factories opening over the past year have wiped out profits. Rather than capturing a growing market, new supply is overwhelming demand, and U.S. and European officials are complaining that China is sabotaging efforts to build their own supply chains.
The Biden administration last month announced a series of rules that will increase tariffs on solar equipment. A two-year moratorium on imports of certain solar products from Cambodia, Malaysia, Thailand and Vietnam expires on Thursday, and the U.S. will also soon end an exemption for bifacial solar modules.
The four countries are the subject of trade complaints that Chinese manufacturers have set up operations there to dodge Obama-era tariffs on solar module imports. Combined, the four countries accounted for more than 70% of U.S. module imports last year, according to BloombergNEF data.
A group of U.S. solar manufacturers is also petitioning Washington to impose additional tariffs of up to 271% on equipment imported from the four countries, a proposal that has caused manufacturers in the four countries to halt purchases of raw materials while they wait for more clarity, BloombergNEF reported last month.
–With assistance from Heesu Lee.
(Updates with Trina report in second paragraph and throughout)
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