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With U.S. tariffs shaking solar exports, ASEAN nations face a pivotal choice between dependence and domestic energy resilience. (Photo: iStock)
China's solar industry, facing a saturated domestic market and U.S. trade restrictions, is increasingly looking to Southeast Asia as a destination for its surplus capacity. This dynamic could make clean energy technologies more affordable for ASEAN countries, potentially speeding up their energy transition. However, avoiding over-reliance on Chinese products remains a key challenge for the region.
Heavy U.S. tariffs undermine ASEAN’s re-export advantage
Last year, the U.S. imported approximately 55 gigawatts (GW) of solar panels, with 88% coming from Southeast Asia—primarily Thailand, Malaysia, Cambodia, and Vietnam. If the U.S. “anti-dumping and countervailing duties” take effect as scheduled on June 9, these four countries could face tariffs as high as 3,251%.
Read more: U.S. to imposes record-high tariffs on solar imports from Southeast Asia
When combined with the “reciprocal tariffs” proposed by the Trump administration, the solar exports from ASEAN nations will likely take a significant hit. Grant Hauber, Asia Strategic Energy Finance Advisor at the Institute for Energy Economics and Financial Analysis (IEEFA), noted that while the current strong demand in the U.S. market may temporarily absorb higher import costs, a sudden 250% price hike would render ASEAN products uncompetitive.
Despite the damage to Southeast Asia’s re-export trade model, the situation also presents an opportunity to accelerate the region’s energy transition.
Benjamin McCarron, Managing Director of Singapore-based consultancy Asia Research & Engagement, believes China will likely implement policies to alleviate pressure on its exporters by promoting renewable energy deployment in ASEAN markets.
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Trump’s tariff war erodes Southeast Asia’s re-export advantage but may accelerate the region’s energy transition. (Photo: iStock)
An opening for transition? Vietnam shows a more proactive stance
While Malaysia is a major solar exporter to the U.S., its domestic energy mix remains dominated by fossil fuels, underscoring that hardware alone cannot deliver a full transition. A report from UK-based energy think tank EMBER highlighted that ASEAN countries are progressing slowly and risk missing out on falling solar and wind costs.
Senior analyst Muyi Yang observed that ASEAN’s solar industry has largely been opportunistic. However, decoupling from the U.S. market could encourage local investment in clean energy, fostering a more resilient and self-sustaining ecosystem. The key, he says, lies in turning export-driven industries into engines for domestic clean-tech revolutions.
Read more: Why U.S. tariffs on Chinese solar firms could benefit Malaysia’s developers
Hauber also emphasized that as wind and solar technology become more affordable, ASEAN nations should adopt a more aggressive transition strategy. Among major ASEAN economies, Vietnam appears most committed to meeting electricity demand with renewables, while Malaysia is leaning toward carbon capture and storage. Other countries face their own unique challenges.
Putra Adhiguna, Managing Director of Indonesia’s Energy Shift Institute, pointed out that current global solar overcapacity offers ASEAN countries access to cheaper systems. However, governments like Indonesia remain cautious, prioritizing trade balance and domestic manufacturing over large-scale imports.
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