Trump Administration Targets Imports of Polysilicon and Derivative Products

As described below, President Trump concurred with Commerce’s finding that imports of polysilicon and its derivatives threaten U.S. economic and national security, ordering a novel minimum import price (MIP) program on top of a 15% ad valorem tariff. The President also authorized Commerce to approve company-specific onshoring plans that could result in mitigation of Section 232 duties. Below we review the findings of the investigation, the responsive actions and open questions, and key implications for stakeholders.

Key Findings in the Polysilicon Investigation
Commerce found that polysilicon—the base material for semiconductors—is essential to U.S. economic and national security, including the defense industrial base. Commerce states that polysilicon also serves as the essential building block for solar products, making solar-grade polysilicon essential to defense programs and artificial intelligence (AI) innovations. Importantly, while semiconductor and solar-grade polysilicon differ in purity levels and commercial applications, Commerce determined that financially viable markets for the solar value chain are essential to incentivize sufficient production volumes for both solar and semiconductor grade polysilicon.

The Proclamation also asserts that foreign governments have designed policies to expand their own production, contributing to global oversupply and threatening the viability of U.S. commercial production and the industrial base. Commerce found that since 2020, global polysilicon production has grown by more than 270%, while the U.S. share of global polysilicon production capacity fell from 50% in 2005 to less than 2% in 2024. For solar inputs, Commerce found that the United States now depends almost entirely on imported ingots, wafers and cells.

Section 232 Remedies
President Trump directed a series of responsive actions, including a combination of a minimum import price and ad valorem tariff for imports of polysilicon and certain derivative articles. Both elements of the action apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after December 4, 2026. President Trump also directed Commerce to establish a program to incentivize U.S. production of raw polysilicon, ingots, wafers and cells. These are discussed below.

Minimum Import Price Program
The Proclamation sets four price floors for imports:

- $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.

Annex I of Proclamation lists the tariff classifications covered by each price point, and grants Commerce discretion to adjust prices to reflect market conditions or other factors affecting fair market value.

Section 2(a) of the Proclamation directs Customs and Border Protection (CBP) to establish a process requiring importers to submit documentation at entry, certifying either that (i) the first arm’s-length U.S. sale of the merchandise (or downstream products made from it), will occur at or above the applicable MIP, or (ii) that the first arm’s-length sale is made pursuant to “fixed terms” in a contract entered into before August 6, 2026. An importer that submits no documentation will owe a specific tariff equal to the applicable MIP, while an importer that submits appropriate documentation of their sale prices but enters merchandise below the MIP will owe the difference between the entered value on the entry summary and the MIP. The Proclamation also provides CBP the authority to bar imports altogether if it concludes that the importer’s documentation has misrepresented arms-length prices.

How exactly Commerce will treat “fixed term” contracts remains open to interpretation, both in terms of what constitutes a contract with “fixed terms” for import prices and whether importers with qualifying contracts pre-dating the action with prices lower than the MIP will still have to pay the difference. Stakeholders should monitor future guidance Commerce and CBP may release in the coming months implementing these provisions in greater detail.

New Section 232 Tariffs
In addition to the MIP, the Proclamation imposes a 15% tariff on imports of polysilicon ingots and derivatives specified in both Annexes I and II, including wafers, unassembled solar cells and finished modules. Raw polysilicon will be subject to the MIP rates but no additional tariff. The new tariff applies in addition to all other duties, taxes and fees

For products of certain reciprocal trade agreement partners, including Japan, South Korea, Taiwan, Switzerland, Liechtenstein and the European Union (EU), the Section 232 tariff and the Column 1 duty rate together will equal 15%, whereas for products of the United Kingdom (UK), the Section 232 rate will be 10%.

Consistent with the recent modifications to the Section 232 steel, aluminum and copper actions, manufacturing drawback remains available in specific circumstances, specifically where the article (i) is not subject to an antidumping or countervailing duty order, (ii) is a product of a specified reciprocal trade agreement partner, and (iii) whose polysilicon content comes entirely from such a partner. Specifically, these trade agreement partners are those with which the Trump administration has entered into deals such as the UK, the EU, Japan, South Korea, Switzerland, Liechtenstein, Mexico, Canada, and future trade and security agreement partners—but not all countries with which the United States has a free trade agreement (FTA).

The Proclamation provides no exemption for USMCA-qualifying goods, and Annex II directs that these duties be collected in addition to special rates under FTAs and preference programs. Covered products admitted to a foreign trade zone (FTZ) on or after December 4, 2026, may enter only under “privileged foreign status” under 19 C.F.R. 146.41, unless they qualify for “domestic status” under 19 C.F.R. 146.43.

The Proclamation also provides that Commerce may “alter the applicability of the MIP and tariffs” if it determines that a trading partner has established a “substantially equivalent MIP.” Additional details regarding negotiations with trading partners or associated timelines are not provided.

Onshoring Incentive Program
The Proclamation authorizes Commerce to establish a program to incentivize investment in U.S. production of raw polysilicon, ingots, wafers and cells (the so-called “Covered Products”). An onshoring plan must include a commitment to build, refurbish or expand a U.S. facility producing Covered Products, and to start construction by January 20, 2029.

In evaluating plans, Commerce will weigh the anticipated construction start date, whether the project timeline and milestones are commercially reasonable, anticipated annual production of Covered Products, whether projected costs and production are reasonable, and how the applicants will allocate the benefit of the reduced tariff rate. If approved, companies may import production equipment and Covered Products free of Section 232 tariffs in volumes commensurate with the committed investment. The broad language of the Proclamation appears to capture a wide range of investment initiatives. Commerce may stipulate more precise requirements in the forthcoming application.

The program builds on an emerging model that ties tariff relief to manufacturing onshoring commitments. For example, Proclamation 11045, issued on Jul 20, 2026, directs Commerce to develop an incentive program allowing primary aluminum producers to submit onshoring plans to Commerce, including information about plans to build, refurbish or expand a facility in the United States with a commitment to begin construction by January 20, 2029. If approved by the Secretary, companies would be allowed to import primary aluminum at half the Section 232 duty in effect (currently 50%) of a quantity that corresponds to the U.S. production facility’s annual output when the onshoring product is complete. Commerce has previously announced similar programs for companies in the pharmaceutical and automotive industries.

Stockpiling
Finally, the Proclamation identifies actions Commerce may take against importers that it deems to be seeking to undermine its objectives prior to the effective date. Specifically, if the Secretary determines that a company is stockpiling polysilicon or polysilicon derivatives before December 4, 2026, CBP can impose additional restrictions on imports by that company and its affiliates. The Proclamation sets no threshold for what constitutes stockpiling, and importers replenishing inventory in the ordinary course may face uncertainty until Commerce or CBP issues additional clarification.

Implications
Although the national security findings underpinning the action lean on the criticality of the semiconductor supply chain, its operative provisions focus more attention on solar-related imports—another commercially significant application for polysilicon.

Although this is the first time Commerce has imposed duties on polysilicon and photovoltaic cells and modules under Section 232, this action builds on over a decade of U.S. trade actions targeting imports of solar cells and modules. Starting in 2012, an alliance of domestic solar producers initiated antidumping and countervailing duty (AD/CVD) cases against foreign solar producers, starting with China. In 2018, the United States initiated a safeguard case under Section 201 on imported solar cells and modules, which included a variety of tariff-rate quotas on parts of the polysilicon value chain. Commerce has subsequently imposed AD/CVD duties on imports of solar cells and modules from Vietnam, Cambodia, Thailand and Malaysia in 2024, and most recently initiated investigations into imports from India, Laos and Indonesia in 2025.

Among other actions, importers should review pricing and existing contracts to confirm that the first arm’s-length sale clears the MIP, strengthen internal controls and documentation that support certification, and plan for market adjustments. Investors weighing additional support for U.S. capacity should start to assess their onshoring plans and proposals soon, in advance of the January 20, 2029, deadline.