Washington prepares a price floor and tariffs on polysilicon to counter China

The Trump administration is preparing to set a minimum import price and impose tariffs on polysilicon and products made from it, with a decision expected later this month, The Japan Times reported. Polysilicon is the refined silicon feedstock used to make both semiconductor wafers and solar cells.

The measures follow an investigation opened under Section 232 of the Trade Expansion Act of 1962, the statute that lets a president restrict imports on national-security grounds. The plan combines a floor price below which imports cannot legally be sold with tariffs on derivative products, and it would allow importers investing in American wafer and cell production to offset some of the cost, Reuters reported. The domestic producers it protects are Hemlock Semiconductor and Wacker Chemie, according to the same reporting carried by US News.

The concentration being addressed is real. China supplies roughly 93.5% of the world's polysilicon. The cost of addressing it is also real. Roth Capital estimated the floor would add about ten cents per watt to imported solar cells.

A minimum import price is a different instrument from a tariff, and the difference matters. A tariff raises the price and lets the market clear above it. A price floor prohibits the transaction below a set level, which removes the competitive pressure that cheap supply places on domestic producers. The predictable result is higher input costs for American solar developers and for data-centre operators building their own generation, at a moment when electricity demand from computing is the binding constraint on artificial-intelligence expansion.