Indonesian Solar Panels Threatened by High US Tariffs Due to Alleged Dumping

The Indonesian solar panel industry is facing serious threats from the United States (US). The US is investigating allegations of dumping practices involving domestic manufacturers, particularly those affiliated with Chinese companies.

These allegations arise from the proliferation of manufacturing activities affiliated with Chinese companies in Indonesia, particularly in Batam. In mid-July 2025, the American Solar Manufacturing and Trade Alliance, comprised of companies such as Tempe, First Solar, Qcells, Hwanha, and Talon PV, filed a trade lawsuit.

They accused Chinese companies of flooding the US market with cheap products manufactured in Indonesia, India, and Laos, after facing high tariffs in their home countries. This prompted the US International Trade Commission (USITC) to launch an investigation into dumping and subsidies.

Batam has become a key transit point in China's solar panel manufacturing supply chain in recent months. A Bloomberg News analysis of trade data shows that Indonesia's 10 largest solar cell and panel exporters exported US$608 million worth of products to the US in the first half of 2025. Of that total, six companies in Batam, which according to company records are directly owned by Chinese solar company executives, accounted for nearly 70% of total exports to the US.

Several of China's largest solar companies have been operating in Batam for the past two years, producing solar panels directly for the US market. According to US customs data, Indonesia exported a total of US$733 million worth of solar panel products between January and May 2025, a 350% increase compared to the previous year.

For example, PT Rec Solar Energy Indonesia is now Indonesia's largest solar panel exporter to the US, with shipments worth US$219 million in the first half of 2025. The company began exporting from Batam in 2023. Its parent company, NE Solar (Cambodia), was established in 2022.

NE Solar's previous director, Huang Yunfei, also owned a Chinese manufacturing plant called Huzhou Zhongdian Solar. In the first half of 2025, 91% of PT Rec's raw materials were imported from Huzhou Paluo Yunpeng New Materials, which is owned by the same company as Huzhou Zhongdian.

Company registration data in Indonesia and China also lists directors of Chinese solar companies or subsidiaries as beneficial owners of five other Batam-based companies: PT Nusa Solar Indonesia, PT Blue Sky Solar Indonesia, PT Allianz Solar Indonesia, PT Thornova Solar Indonesia, and PT Msun Solar Indonesia.

These six Chinese-owned companies exported a total of US$419 million worth of solar cells and panels directly to the US in the first half of this year, a 148% increase compared to last year. Bloomberg has attempted to confirm this information but has not yet received a response.

Solar panel exports to the US have also increased in Laos and India, which were not previously affected by US tariffs. Laos' exports jumped from almost zero in early 2024 to US$717 million in the first five months of this year, while India's increased from US$10 million in 2022 to US$345 million this year.

This isn't China's first maneuver to navigate trade barriers. More than a decade ago, when Western countries imposed tariffs on Chinese solar products, Chinese manufacturers shifted production to Vietnam, Malaysia, and Thailand. This strategy worked until the US closed the loophole in 2024 with anti-dumping and anti-subsidy investigations into Cambodia, Vietnam, Malaysia, and Thailand. In April, the Trump administration imposed 3.521% tariffs on these four Southeast Asian countries.

The tariffs forced US buyers to shift supplies, and Indonesia, unaffected by the tariffs, became one of the biggest beneficiaries. "As scrutiny of other jurisdictions in Southeast Asia increases, factories continue to shift covertly," said Niclas D. Weimar, chief technology officer of Sinovoltaics, a solar industry compliance firm.

If the USITC concludes unfair trade practices by Indonesia, Laos, and India, a new round of tariffs could be imposed immediately. "Under President Trump, the United States will no longer be a dumping ground for cheap imports that harm our industries and workers," said White House spokesman Kush Desai. The Trump administration has not yet released a detailed definition of the transshipment practice.

The Batam Investment Agency (BP Batam) stated that it has not received official confirmation regarding the anti-dumping investigation. "So far, partner countries have recognized and appreciated the role of the Indonesian government, BP Batam, and the Batam City government in responsibly managing global trade dynamics," BP Batam said in response to Bloomberg News.

Requests Government Support

The Indonesian Solar Module Manufacturers Association (Apamsi) expressed concern over the US allegations. Apamsi Chairman I Made Sandika Dwiantara expressed concern that the local photovoltaic (PV) industry would be harmed if dumping practices were proven. "We continue to coordinate with stakeholders to prevent this from happening in Indonesia," said Made.

Made noted that local manufacturers are continuing to strive to develop the domestic solar panel industry ecosystem. He urged the government to thoroughly investigate the alleged transshipment. "If it turns out there are many claims of 'Made in Indonesia,' it could actually be just a trade ploy," he explained. Made added that the US market has significant potential and helps absorb local manufacturers' production.

Data from the Central Statistics Agency (BPS) shows that Indonesian solar panel exports to the US (HS 85414300) have increased significantly, from US$19.88 million in 2021 to US$553.44 million throughout 2024. From January to May 2025, total exports reached US$433.08 million. "If this dumping policy is imposed, it will be very detrimental to manufacturers whose markets rely on exports to the US," said Made.

The Director of Trade Safeguards at the Ministry of Trade, Reza Pahlevi, confirmed that he had received the anti-dumping (AD) and countervailing duty (CVD) investigation petition. "Submitting this petition is the initial stage," Reza said. The US Department of Commerce (USDOC) has approximately 20 days to decide on the eligibility of the petition. "If approved, the investigation process will begin immediately," he added.

Reza emphasized that Indonesia respects US trade safeguard mechanisms as an important trading partner. The Ministry of Trade encourages a transparent, fair, objective, and data-driven process. "We will continue to coordinate to protect Indonesia's interests, including ensuring that exports to the US continue to run smoothly," Reza concluded.