Solar companies face significant financial challenges due to proposed retroactive tariffs that could impact billions of dollars in past imports.
Major importers may be liable for astonishing amounts from 2022, with estimates indicating potential obligations ranging from $54 to $67 billion. This situation particularly affects solar products from Southeast Asia, which benefited from duty-free entry during President Biden’s emergency suspension.
Shockwaves
Wells Fargo has flagged Canadian Solar at the highest risk, citing significant uncertainties and potential liabilities that could exceed its market cap and cash reserves.
The company’s market value is between $655 million and $760 million. Meanwhile, First Solar’s stock rose following a recent ruling.
Origins
In June 2022, President Biden declared a national emergency due to a critical shortage of solar modules affecting US electricity generation.
Proclamation 10414 was issued to suspend import duties on solar products from Vietnam, Cambodia, Thailand, and Malaysia for 24 months to avoid supply disruptions.
Mounting Pressure
The moratorium was introduced to mitigate supply shortages while domestic manufacturing improved.
During this time, solar exports from Southeast Asia surged, with imports from four countries increasing by 217% year-over-year, exceeding 120 gigawatts.
The Ruling
On August 22, 2025, the US Court of International Trade ruled in Auxin Solar v. United States that President Biden’s solar moratorium was illegal.
Chief Judge Timothy C. Stanceau found that Presidential Proclamation 10414 exceeded presidential authority and violated federal law. The ruling is identified as [2025-ITC-0287].
Imposed Duties
A recent ruling allows US Customs and Border Protection to impose duties on a significant quantity of solar products imported between June 2022 and June 2024.
Data indicates that during this timeframe, between 71 and 88 gigawatts of solar equipment from four Southeast Asian countries entered the US market without incurring duties.
Celebrating The Decision
Industry leaders welcomed the recent decision, noting its significant impact on trade.
Legal expert Thomas G. Allen from K&L Gates mentioned that the affected imports were valued at tens of billions during the suspension. Domestic manufacturers saw the ruling as confirmation of their concerns about unfair competition.
Solar Imports
Recent industry data highlights significant increases in solar imports for 2024. According to the American Alliance for Solar Manufacturing Trade Committee, imports from Vietnam reached a record high of 2.5 gigawatts in June 2024.
This surge led to an average monthly import rate of 2.3 gigawatts during the year’s second quarter (April to June), starkly contrasting with an average of less than 1.5 gigawatts in the six months prior.
Bypassing Tariffs
Recent findings show that Chinese solar manufacturers have relocated operations to Southeast Asia to bypass US tariffs.
In Vietnam, factories sourced 89% of their silicon from China, well above the 40% World Trade Organization threshold for country-of-origin requirements.
Retroactive Duties
Duties will be assessed retroactively, with certain companies facing rates as high as 254%. For Vietnamese imports, the duty rates vary significantly, with JA Solar experiencing a rate of 120.69%, while non-cooperating firms could face an even higher rate of 813.92%.
Additionally, Cambodian exporters may encounter extremely steep rates, potentially reaching up to 3,521% if they do not comply with investigations conducted by the Commerce Department.
Frustrations
Solar developers expressed deep concern about project economics amid policy uncertainty.
Legal experts at K&L Gates warned the ruling “complicates things because it injects a further potential economic burden on solar projects” already struggling with tightened tax credit requirements and construction deadlines.
Leadership
Auxin Solar, the California manufacturer that initiated the original circumvention complaint, celebrated victory after years of advocacy.
The court sided with Auxin’s argument that the pause allowed Chinese manufacturers to sidestep existing trade duties by routing products through Southeast Asia.
Recovery
US manufacturers positioned themselves to benefit from reduced Southeast Asian competition.
First Solar forecasted 2025 sales between $5.3-5.8 billion, up 32% from 2024, while announcing patent infringement litigation against Chinese competitor JinkoSolar for TOPCon technology violations.
Skepticism
Industry experts questioned implementation logistics and potential appeals.
Legal observers expect a Federal Circuit appeal given enormous stakes, with K&L Gates noting “enough money at stake and issues consequential enough that an appeal seems likely” from defendants including Canadian Solar and NextEra Energy.
A Recalculation
The ruling forces fundamental recalculation of nationwide solar project costs and supply chain strategies.
Developers must now account for potential retroactive liabilities while racing to meet Inflation Reduction Act requirements for federal tax credits under newly tightened beginning-of-construction rules.
Enforcement-Focused Trade Policy
The decision validates enforcement-focused trade policy while challenging presidential emergency powers.
The court found that presidents lack the authority to unilaterally suspend existing trade law, potentially limiting future executive branch trade interventions during supply chain emergencies or national security crises.
Reshaping Global Trade
Vietnam leads Southeast Asia in solar manufacturing capacity, with the ruling threatening this dominance as US market access becomes uncertain.
The decision potentially reshapes global solar trade flows and redirects billions in manufacturing investment away from the affected Southeast Asian countries.
Potential Penalties
Critical Circumstances provisions could extend retroactive duties beyond the core moratorium period.
Commerce Department findings for Thailand and Vietnam exporters mean additional penalties up to 90 days before preliminary determinations for companies that accelerated imports anticipating tariff reimposition.
Broader Concerns
The case reflects broader concerns about Chinese economic influence and supply chain dependence.
Domestic manufacturers framed their fight as protecting US industrial capacity against unfair competition through Southeast Asian manufacturing relocations designed to circumvent existing tariffs.
How Trade Policy Reshapes Industries
This ruling represents more than trade enforcement—it signals America’s determination to rebuild domestic solar manufacturing despite short-term supply disruptions.
The potential $54-67 billion in duties demonstrates how quickly trade policy can reshape entire industries and fundamentally alter global supply chain relationships.