On November 6, voting in various states in the United States concluded. According to reports from CNN, the Associated Press, and others, Trump secured North Carolina (16 electoral votes), Georgia (16 electoral votes), and Pennsylvania (19 electoral votes), three key swing states, and has obtained at least 270 electoral votes. The Trump camp has also declared victory.
As the U.S. election progresses, discussions from all sectors have become increasingly heated. In discussions about the impact on China, there are opinions that Harris's election would bring "short-term gains but long-term losses," while Trump's election would bring "short-term losses but long-term gains." The TMTPost App has been following some discussions among photovoltaic industry practitioners. Although there are disputes and differences, it seems that relatively more people believe that from a commercial interest perspective, Trump's rise to power is not the "worst" outcome and might even be better than the scenario where Harris is elected and continues Democratic policies.
The Democratic Party's Pain for China's Photovoltaic Industry
For Chinese companies, the series of Sino-U.S. trade disputes initiated by Republican candidate Trump during his previous presidential term are surely still fresh in memory. However, in the photovoltaic field, the injuries suffered under the Democratic Party are no less than those during the Republican administration.
In 2010, during the first term of Democratic President Obama, the U.S. government announced its acceptance of the United Steelworkers' petition regarding Chinese export products gaining a price advantage through government subsidies, thereby encroaching on the U.S. market and jobs. This led to the initiation of a "301 investigation" into Chinese photovoltaic, wind energy, electric vehicles, and other new energy products. In October 2011, an anti-dumping and countervailing investigation was launched against more than 70 Chinese photovoltaic companies. This marked the beginning of the "double anti" measures that severely impacted Chinese photovoltaics. After the U.S. Department of Commerce ruled in favor of the "double anti" measures in 2012, raising the tax rate for over 60 responding companies to more than 30%, many Chinese domestic manufacturers were forced to exit the U.S. market. The European Union's follow-up actions further exacerbated the situation for Chinese photovoltaic companies. Behind this turmoil, aside from international relations, the financial crisis, and changes in industry dynamics, many voices pointed out that the Obama administration's over $80 billion clean energy strategy was impacted by Chinese new energy manufacturing. This was especially linked to the bankruptcy of the U.S. domestic new energy manufacturer Solyndra, favored by the administration, and the associated U.S. Department of Energy loans, which were closely related to the final decision-making.
After Trump took office, there were both increased tariff measures on photovoltaics and some exemption policies. The most famous of these was the exemption for four Southeast Asian countries (Cambodia, Malaysia, Thailand, and Vietnam), which led many Chinese photovoltaic companies to set up factories in Southeast Asia and continue doing "American business" from there. However, after the current Democratic President Biden took office, the competition between China and the U.S. in new energy manufacturing intensified. The Southeast Asia tariff exemption officially ended on June 6 this year, greatly impacting Chinese companies' production capacity in Southeast Asia. New tariff measures targeting Chinese photovoltaics, energy storage, and new energy vehicles have also been put on the agenda.
Several institutions previously analyzed that if Harris were elected, she would continue the Biden administration's policies, further promoting the "Green New Deal" and continuing or even strengthening the Inflation Reduction Act (IRA) to support the U.S. domestic photovoltaic manufacturing industry. In the U.S. presidential debate last September, Harris clearly stated her support for the IRA, having cast a crucial vote for it, and praised the effective clean energy investments during Biden's term, which created jobs and supported the revival of American manufacturing.
A photovoltaic industry practitioner previously stated that if the Democratic Party continues to govern, although the overall pie of the U.S. photovoltaic market will grow larger, Chinese companies will face more intense competition and various restrictions, resulting in a smaller share for them.
In addition, during the Democratic Party's administration, the relationship between the United States and the European Union, India, and other countries is often closer. On the path of Chinese photovoltaics going global, there are already signs of "joint" blockades, and the risk of "small courtyards with high walls" turning into "large courtyards with high walls" is increasing.
However, an analyst engaged in overseas research believes that many leading Chinese photovoltaic companies have already set up factories in the United States. For these capacities that have landed in the United States, the election of Harris, who supports the IRA, should be more reassuring. But if Trump comes to power, these companies may have more concerns about whether they can receive subsidies and the future of their American factories. TMTPost App also noted that currently, the "Big Five" of China's photovoltaic modules (JinkoSolar, LONGi Green Energy, JA Solar, Trina Solar, and Canadian Solar) have all set up factories in the United States, and related production lines have been put into operation this year. However, only part of the capacities of JinkoSolar and Canadian Solar have received IRA subsidies.
The Unpredictable Trump
Besides the subsidy issue for Chinese companies' American capacities, there are at least two major risks for Chinese photovoltaics if Trump is elected: one is the tariff issue, and the other is the overall development trend of new energy.
During the campaign, Trump stated that if elected, he would impose a 10-20% tariff on imported goods worldwide and a 60% tariff on Chinese goods. Although the numbers seem quite "shocking," in reality, under the current tariff policy, most Chinese photovoltaic products have already been excluded from the U.S. market. Whether to increase tariffs may not have much impact on major material companies. Moreover, Trump's consistent "America First" policy and exaggerated tariff measures are likely to harm the relationship between the United States and its allies. As a result, the overseas path for Chinese photovoltaic companies in Europe, Latin America, and other regions may even become smoother.
In addition, Trump has always shown little interest in global climate governance and clean energy development. The market generally believes that the U.S. photovoltaic industry would face difficulties if Trump is elected. According to the forecast of the Solar Energy Industries Association (SEIA), whether Trump is elected, the length of his term, and related policy changes will form different expectations. The pessimistic scenario (long-term election, IRA cancellation) would result in 200GW less photovoltaic installed capacity in the United States over the next decade compared to the optimistic scenario (which is almost the current cumulative installed capacity of photovoltaics in the United States). Although there is still uncertainty about whether subsidies will decline, it is almost certain that the growth rate of photovoltaic development in the United States and even the world will be affected.
However, a photovoltaic industry practitioner believes that the biggest impact of the aforementioned issues on China's photovoltaic sector may still be on companies setting up factories in the U.S., while more harm is likely to be borne by the heavily indebted American photovoltaic manufacturers. Overall, in major and new markets such as Europe, India, the Middle East, and Latin America, the number of competitors truly capable of competing with Chinese companies may further decrease in the future. The TMTPost App has noted that due to subsidies not being implemented in time, investments failing to recover costs, and debts being difficult to repay, a wave of bankruptcies among American photovoltaic companies has already occurred from 2023 to 2024, and the pressure on local manufacturers in the U.S. may increase further if Trump is elected.
Of course, there are still many unpredictable aspects of Trump's policies if he returns to the White House, such as what role the new energy giant Musk will play, whether foreign companies investing in the U.S. to build factories and create jobs will be welcomed, and changes in tariff policies, among others. For China's photovoltaic industry, it can only assess the situation and act accordingly. (Author | Hu Jiameng, Editor | Liu Yangxue)
