China's Solar Trade Routes Exploit Tariff Gaps as US Tightens Import Rules

To understand President Donald Trump's latest effort to protect U.S. solar manufacturers, it helps to follow a roughly 20,000-mile trade route that runs through Kenya and a small Indonesian island near Singapore, according to a Bloomberg News analysis.

Solar panels are at the center of a growing U.S.-China trade dispute as manufacturers shift production across countries to navigate tariffs.

The route allowed companies to obscure manufacturing work carried out in China and Indonesia before shipping solar panels to the lucrative U.S. market, according to an analysis of trade and company data by Bloomberg.

The route was established in less than a year and eventually supported trade flows worth more than $100 million a month, the report said.

Such rapid reshuffling of global trade routes has become increasingly common in the solar industry as U.S. authorities have sought to crack down on what they regard as unfair Chinese trade practices.

In response to new tariffs, companies have shifted production from one country to another — for example, from Vietnam to Indonesia — while U.S. trade authorities have responded with additional tariffs.

Trump's latest measures are intended to curb this cycle by applying tariffs and minimum prices to imports of polysilicon and related products, including wafers, cells and modules.

The new measures are expected to impose 15% tariffs and minimum import prices above prevailing global levels beginning Dec. 4, according to the Bloomberg report.

The measures are intended to prevent companies from circumventing U.S. trade restrictions by moving production through third countries.