Late yesterday President Trump issued a Proclamation to newly impose minimum import pricing on imports of polysilicon and its derivatives — including polysilicon ingots and wafers, solar cells, and solar modules — as well as an additional 15% tariff on imports of such products from most countries, effective December 4, 2026.
The President announced that he was taking this action, which follows an investigation initiated last year under Section 232 of the Trade Expansion Act of 1962, to support his determination of the need to onshore domestic production of semiconductors, of which polysilicon is an essential input.
To further encourage onshoring of manufacturing offtake for domestically produced polysilicon, the President authorized the Secretary of Commerce to enter company-specific U.S. investment plans to strengthen the domestic supply chain in exchange for reduced tariffs on imported production equipment and polysilicon products.
National Security Rationale Links Solar Grade Poly to Semi Grade Poly
In January, President Trump issued Proclamation 11002 which found that the increased imports of semiconductors, semiconductor manufacturing equipment, and derivative articles pose a threat to the national security and economy of the United States. In that Proclamation, President Trump enacted a “two-phase” action plan to adjust imports by initially applying a 25 percent tariff rate on certain imports and thereafter adjusting that tariff rate based on various trade negotiations.
In yesterday’s polysilicon Proclamation, the President not only found that polysilicon and its derivative products are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States, but the President also linked semiconductor and solar grade polysilicon demand.
Specifically, the Proclamation reasoned that the need to protect and incentivize the domestic production of solar products that use solar grade polysilicon is to generate offtake within the United States to support increased polysilicon production. The Proclamation found that because the demand for solar-grade polysilicon exceeds the demand for semiconductor-grade polysilicon, the polysilicon manufacturers are dependent on the production of lower purity, solar-grade polysilicon to achieve high production volumes necessary to reduce unit costs for production of all polysilicon, including semiconductor-grade polysilicon. Based on this finding, the Proclamation reasoned that without a financially viable market for United States solar-grade polysilicon, United States polysilicon producers cannot grow domestic manufacturing of polysilicon generally.
First Use of Minimum Import Prices Combined with Tariffs
Beginning on December 4, 2026, the Proclamation sets forth a Minimum Import Price (“MIP”) program to “create an economic environment conducive to increasing United States production of the full range of these goods by ensuring a commercially viable market for them.” Pursuant to the Proclamation, the applicable minimum import prices for imported polysilicon and polysilicon derivatives shall be:
- $21 per kilogram for polysilicon;
- $100 per kilogram for polysilicon ingots and wafers;
- $0.22 per watt for solar cells; and
- $0.38 per watt for solar modules.
The President also proclaimed to apply a 15 percent tariff rate from most countries with the exception of (A) imports from Japan, Korea, Taiwan, Switzerland, Liechtenstein, or a member nation of the European Union, which are subject to a cap of 15% on total duty rates and (B) imports from the United Kingdom that are capped at a rate of 10% total duty rate. These upper bound limits on the duty applicability of Section 232 and Most Favored Nation tariffs follow U.S. commitments in Agreements on Reciprocal Trade with these nations.
In addition, the Proclamation permits the Secretary of Commerce to adjust the minimum import prices to reflect market conditions or other factors affecting the fair market value of covered products.
MIPs Apply to First Sale to Unrelated Parties, Including of a Manufactured Downstream Article
To implement the MIP program, the Proclamation directs U.S. Customs and Border Protection (“CBP”) to require importers of covered merchandise to submit documentation at entry establishing or certifying either that any first arm’s-length sale of the imported merchandise or downstream products made from that merchandise in the United States will occur at or above the applicable MIP, or that any first arm’s-length sale of the imported merchandise is pursuant to fixed terms in a contract entered into prior to August 6, 2026.
Failing to supply required documentation will result in CBP applying a specific tariff equal to the applicable MIP. CBP is to monitor and enforce the accuracy of importer documentation submitted. If CBP determines that an importer’s documentation was materially inaccurate or that an importer has materially failed to comply with its certification, the Proclamation allows CBP to permanently prohibit that importer and its affiliates from importing polysilicon and polysilicon derivatives into the United States. CBP may also impose penalties on the noncompliant importer to the extent consistent with applicable law.
Onshoring Incentives
Recognizing the need to generate demand for domestic polysilicon, the Proclamation authorizes the Secretary of Commerce to solicit and accept onshoring plans from companies. To qualify, the plan must build, refurbish, or expand a facility in the United States that will produce raw polysilicon, ingots, wafers, or cells and requires a commitment to begin construction by January 20, 2029, the end of President Trump’s term.
If approved, the Secretary will allow the company to import necessary production equipment and raw polysilicon, ingots, wafers, or cells in volumes the Secretary deems commensurate with the company’s newly committed investment, without paying applicable section 232 duties.
As part of determining whether to approve the application, the Secretary will consider: the anticipated start date of construction, whether the proposed plan’s project timeline is commercially reasonable, whether the proposed plan’s project milestones are commercially reasonable, the anticipated annual production from the onshoring project, and whether the proposed plan’s anticipated costs and production projections are reasonable.
How We Can Help
Cassidy Levy Kent’s team of attorneys, licensed customs brokers, and compliance specialists has extensive experience in the solar industry working with domestic manufacturers, importers, and developers. We help clients navigate changing regulatory environments that require additional compliance and recordkeeping, and assist companies in optimizing tariffs and onshoring.