China’s Solar Sector Struggles with Losses Amid Escalating Trade Tensions

BEIJING: This week, China's solar manufacturers announced losses as U.S. President Donald Trump's trade war intensified pressure on demand in a sector where leading producers were already contending with low prices and export tariffs to the United States. Leading manufacturers Longi Green Energy and JinkoSolar each disclosed a net loss of 1.4 billion yuan ($193 million) for the first quarter, whereas losses for competitors JA Solar and Trina Solar amounted to 1.6 billion yuan and 1.3 billion yuan, respectively. Longi reported a net loss of 8.6 billion yuan for 2024 and informed analysts during a call that solar product demand was anticipated to remain stable year-on-year in 2025.

"Throughout the reporting period, prices in the solar industry supply chain were low, and overseas trade policies affected demand, putting pressure on all industry segments," stated Jinko, noting that losses rose from 473.7 yuan in the last quarter of the previous year. The firm's sales of solar products, comprising silicon wafers, solar cells, and modules, decreased by 12.68 per cent compared to the previous year, totalling 19,130 megawatts in the quarter. Jinko stated it experienced the most rapid expansion in the Asia Pacific and Africa areas, although China, the U.S., and Europe continue to be the largest markets.

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Prior to Trump's trade war, which saw him impose 145% tariffs on Chinese goods, Chinese solar exports were already subject to tariffs in the U.S., the second-largest solar market following China.  Consequently, Chinese producers established manufacturing hubs in Southeast Asian nations, which U.S. manufacturers subsequently focused on with trade cases claiming these countries were inundating the market with low-cost products. In reaction to one of these situations, the U.S. last week implemented tariffs reaching up to 3,500 per cent on solar products made by Chinese solar companies operating in Malaysia, Cambodia, Thailand, and Vietnam.

In its investor call, Jinko reported that the U.S. accounted for approximately 5 per cent of its sales during the quarter. Jinko informed investors that, besides solar products, tariffs were also rendering the sale of battery storage systems to the U.S. excessively costly. At the same time, CSI Solar, a subsidiary of China's Canadian Solar listed on NASDAQ, intends to expedite the transfer of manufacturing to regions with low tariffs and is in discussions with key clients and suppliers to fairly distribute tariff expenses, according to a filing made to the U.S. Securities and Exchange Commission on Monday.