The Ripple Effect EP.3: Strategic Trade Shifts – Thailand’s Solar Sector Under U.S. Scrutiny

The U.S. government’s recent tariff policy implementation represents a profound realignment within Southeast Asia’s solar supply chain. On April 21, 2025, the U.S. Department of Commerce announced final anti-dumping and countervailing duties on solar panels and components from Thailand and several neighboring countries. Subject to a 37% Reciprocal Tariff Tax, Thailand’s solar export industry, which depends heavily on the U.S. market, now confronts intensified trade pressures.

This policy shift has dramatically affected Thailand’s solar industry, currently ranked as the fourth-largest global exporter of solar panels. In 2023, according to Trade Policy and Strategy Office’s database, Thailand exported solar panels valued at over 159 billion baht, with more than 75% destined for the U.S. market. The U.S. policy recalibration has disrupted the industry’s structural foundation, creating substantial challenges for local manufacturers reliant on American buyers.

The policy change was precipitated by concerns from U.S. solar manufacturers who suspect Thailand could function as an indirect manufacturing hub for China, enabling Chinese products to circumvent U.S. tariffs. In recent years, production has increasingly migrated from China to Thailand, Malaysia, Vietnam, and Cambodia, where solar panels are frequently exported at prices below production costs, with many manufacturers benefiting from subsidies provided by China. This shift has significantly undermined U.S. solar manufacturers’ competitive position.

Based on these concerns, the U.S. initiated a comprehensive investigation in 2024, culminating in the imposition of final tariffs substantially higher than initially projected. Some Thai solar companies now face tariffs approaching 1,000%, effectively eliminating their price competitiveness. Meanwhile, countries exempt from these tariffs, including India, Laos, and South Korea, have capitalized on this opportunity to expand their market presence.

Conclusion

While the current situation presents significant challenges, it simultaneously offers a critical opportunity for Thailand to strengthen its domestic clean energy industry, reduce export dependency, and enhance long-term energy security. With its abundant solar energy potential, Thailand is well-positioned to develop robust technological and manufacturing capabilities. By doing so, the country could establish itself as a regional leader in the energy sector in the coming years.

Although the U.S. anti-dumping and countervailing duty measures pose a substantial threat to Thailand’s solar panel industry, the final outcome remains undetermined. The U.S. International Trade Commission is scheduled to decide on June 2, 2025 whether these tariffs will be permanently implemented while negotiation on those tariff and non-tariff measures will also be under consideration.

Author: Panisa Suwanmatajarn, Managing Partner.

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