Ongoing U.S. tariffs on solar imports could stall ASEAN’s clean energy shift. (Photo: iStock)
Southeast Asia’s clean energy industry is bracing for its third major setback, as U.S. tariffs intensify pressure on the wind and solar supply chains.
The compounded tariff impact threatens to shrink component exports and further discourage reinvestment in the sector—particularly in countries heavily reliant on U.S. markets such as Cambodia, Thailand, and Malaysia.
U.S. tariffs undermine Malaysia’s solar industry
Nithi Nesadurai, Director of Climate Action Network Southeast Asia, described the latest series of U.S. actions—including withdrawal from the Paris Agreement, cuts to USAID climate financing, and increased tariffs—as a "triple whammy" against ASEAN’s clean energy transition. According to Nesadurai, these tariffs worsen already volatile conditions in developing countries, especially those in Southeast Asia.
Malaysia has a strong presence in the global solar supply chain. In 2022, Malaysia ranked as the world’s third-largest solar module producer and remains a key supplier of polysilicon—a critical material for solar cells. The sector was first hit with a 30% tariff on U.S. exports in 2018. In 2024, this rose by another 9%, followed by an additional 24% in the most recent round.
With the global push for net-zero emissions gaining momentum, ASEAN economies are increasingly intertwined with energy transition efforts. Malaysian Prime Minister Anwar Ibrahim emphasized during an investment forum that green growth is no longer a matter of environmental virtue but strategic economic necessity. Innovations in low-carbon technologies, he noted, will shape industrial development over the next decade.
Economic fallout looms as tariffs weigh on ASEAN’s green transition
The rollback of climate policies under the Trump administration—combined with punitive tariffs—has already shaken investor confidence in the global energy transition. For ASEAN countries, whose clean energy exports are significantly tied to the U.S. market, the effects are even more pronounced.
According to BloombergNEF, while Thailand and Cambodia export fewer clean energy products to the U.S. in absolute terms compared to the EU, their reliance is much higher—over 9% of their exports go to the U.S., placing them among the top three globally alongside South Korea. Malaysia ranks fourth, followed by Japan. In contrast, clean energy exports from the EU to the U.S. represent just 1.14% of their total.
To make matters worse, high tariffs not only dent export figures but also hamper domestic clean energy investment in ASEAN, further slowing decarbonization. Data from UK-based think tank Ember shows that clean energy accounts for just 26% of Southeast Asia’s electricity generation—well below the global average of 40.9%.
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