Solar Giant Longi to Cut Southeast Asia Production as U.S. Tariff Exemption Expires
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Chinese solar giant Longi Green Energy Technology Co. Ltd. (601012.SH) plans to suspend some production lines at its factories in Malaysia and Vietnam, an employee told Caixin, a move that some of its peers are also expected to take as a two-year tariff waiver granted by the U.S. to several Southeast Asian countries expires Thursday.
The U.S. granted a two-year tariff exemption in 2022 for solar products imported from Malaysia, Cambodia, Thailand and Vietnam. The move, which was intended to help meet U.S. demand for the products, has been exploited by Chinese solar manufacturers, who have shifted their supply chains to those countries and exported goods to the U.S. from there to avoid taxes on products imported directly from China.
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- Longi Green Energy plans to suspend production lines in Malaysia and Vietnam as a two-year U.S. tariff waiver expires.
- The U.S. granted exemptions in 2022 for solar products from several Southeast Asian countries, which Chinese firms exploited to avoid duties.
- Longi faces operational challenges, a competitive market, and potential future duties, leading to job cuts and a reported net loss of 2.35 billion yuan in Q1 2023.
- Longi Green Energy Technology Co. Ltd.
- Longi Green Energy Technology Co. Ltd. plans to suspend some production lines in Malaysia and Vietnam as a two-year U.S. tariff waiver expires. The company cited operational challenges and plans to minimize worker impact by adjusting shifts. Longi, once the largest solar manufacturer by market capitalization, faces falling prices and shrinking profit margins and posted a net loss of 2.35 billion yuan in the first quarter of this year.
- 2022：
- The U.S. granted a two-year tariff exemption for solar products imported from Malaysia, Cambodia, Thailand and Vietnam.
- First quarter of 2024：
- Longi posted a net loss of 2.35 billion yuan ($325 million) after making a profit of 3.64 billion yuan in the same period of 2023.
- March 2024：
- Longi announced plans to cut thousands of jobs, citing an 'increasingly competitive environment.'
- May 2024：
- The White House said the tariff exemption for the four countries 'will end as scheduled,' after it found Chinese solar manufacturers were circumventing duties by exporting from those countries.
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