U.S. trade uncertainty presents domestic opportunities for Southeast Asian renewables suppliers

On 21 April 2025, the US (U.S.) Division of Commerce introduced tariffs of as much as 3,521% on photo voltaic imports from Southeast Asian nations, threatening the export-oriented methods of regional clear vitality producers. Nevertheless, the disruption additionally presents a possibility for Southeast Asian renewables producers to readjust towards fast renewables adoption in home markets quite than specializing in exports to the U.S. This strategy may assist soak up export-led output that present and proposed U.S. tariffs would possibly displace. Extra importantly, renewable vitality can assist Southeast Asian markets hedge towards market-based shocks from USD-denominated commodity costs and forex fluctuations in unsure financial and geopolitical occasions. 

Photo voltaic know-how commerce between Southeast Asia and the U.S.

Whereas the 2022 U.S. Inflation Discount Act meant to incentivize a shift of photo voltaic manufacturing onshore, Southeast Asia has remained a serious provider of accomplished photo voltaic panel modules to the nation. In 2024, the U.S. imported 55 gigawatts (GW) of photo voltaic panels, with 88% (or 48GW) coming from Southeast Asia. International locations within the area additionally provided U.S. assemblers with 14GW of photo voltaic cells – the important thing enter for photo voltaic panels. General, such imports helped to help 56% of U.S. demand in 2024. 

Southeast Asia has remained a serious provider of photo voltaic cells and accomplished photo voltaic panels to the U.S. Photo voltaic cells are the weather that convert gentle to vitality and are usually created from silicon. Photo voltaic panel modules are bigger assemblies comprised of a number of photo voltaic cells, cell wiring, frames, glass, and different bonding and sandwiching supplies wanted to create a working energy era unit.

U.S. tariffs change the outlook for Southeast Asian photo voltaic exports

The U.S. Worldwide Commerce Administration (ITA) introduced the conclusion of its investigation concerning alleged product dumping by photo voltaic producers in Cambodia, Malaysia, Thailand, and Vietnam on 21 April 2025. Anti-dumping and countervailing obligation tariffs have been levied on over 30 firms, starting from round 14% to over 3,400%, with a median of 870%. With out ITA intervention, the particular tariffs on particular person photo voltaic know-how exporters in Thailand, Malaysia, Cambodia, and Vietnam will take impact on 09 June 2025. Whereas at present sturdy U.S. demand for photo voltaic merchandise may help some elevated import prices, any value will increase past 250% would make most Southeast Asian imports untenable. 

Notably, the ITA commerce measures are to be utilized on high of already proposed general tariffs that the U.S. administration announced on 02 April 2025. Whereas these tariffs are briefly on hold for 90 days, the dangers of relying totally on exports to the U.S. for development are clear for Southeast Asian producers, who ought to take instant steps to diversify their finish markets.

Minimizing financial dangers by rising home renewable vitality capability

Even earlier than U.S. tariff modifications have been introduced, a chronic interval of market volatility appeared doubtless all through 2025 and past, with markets experiencing fluctuations in fossil gas commodity costs, trade charges, or base rates of interest (on account of potential high inflation). Moreover, there’s now a big risk of declining economic growth amongst Southeast Asian nations whereas commerce disputes unfold. 

Nevertheless, with this problem comes a possibility for Southeast Asia’s vitality sector a lot nearer to dwelling: home consumption. Rising markets may mitigate dangers by maximizing home vitality provide from low-cost renewable vitality. The know-how represents a one-time, upfront funding with no ongoing, USD-denominated gas prices. Each megawatt (MW) put in is a pure hedge towards international market volatility. 

Earlier than the present commerce uncertainty, Southeast Asian nations had already set targets for diversifying vitality sources by massive renewables additions. Indonesia, for instance, has targeted 75GW of photo voltaic vitality by 2040, including 5GW per 12 months. Nevertheless, there isn’t any want to attend that lengthy, given risky market-based fossil gas costs. 

China put in photo voltaic farms at a fee of 759MW per day in 2024, demonstrating that giant portions of renewables will be added to the grid in months. These investments accounted for 10% of the country’s GDP growth that 12 months. This means the potential of renewable vitality to insulate nations from international market shocks whereas serving to make the most of the renewable know-how outputs created domestically. 

Photo voltaic and wind know-how prices have continued their downward trend, with battery storage know-how becoming a member of that trajectory. Renewables are the lowest-cost answer for every Southeast Asian nation, notably the place utilities try to satisfy new, incremental demand. 

Absorbing displaced inexperienced tech demand inside Southeast Asia

Displaced U.S. demand for inexperienced tech output from Southeast Asian nations might be absorbed domestically and regionally. Nevertheless, proactive, incentivized insurance policies are wanted to maximise the home set up of renewable vitality tasks. Indonesia lags behind essentially the most, with photo voltaic making up only 0.2% of its complete vitality. Vietnam, the Philippines, Malaysia, and Thailand have additionally struggled to extend renewables output for various causes. 

Vietnam appears most ready to make use of renewable vitality to satisfy quickly rising electrical energy demand. Along with increased revised photo voltaic and wind targets, its new electricity law and implementing decrees encourage renewable growth as a part of the bottom nationwide vitality combine. On 15 April 2025, Vietnam revised its nationwide energy growth plan, proposing to serve its rising vitality wants by advancing its photo voltaic capability goal from 34GW to 73GW by 2030 and as much as 296GW by 2050. 

The Philippines is planning for its fourth spherical of bidding for renewable vitality tasks round mid-2025, aiming so as to add greater than 9GW of capability. The primary two rounds, held in 2023, awarded 5.5GW of capability, and the third spherical, accomplished in February 2025, attracted 7.5GW of proposals, exceeding the 4.5GW authorities goal. Nevertheless, there have been points in finishing these tasks. The nation’s sophisticated coverage atmosphere for securing grid interconnections has led to a number of awarded tasks being cancelled or indefinitely delayed. 

Malaysia’s current National Energy Transition Roadmap establishes sustainability targets however doesn’t embody agency, supporting commitments to capability or era from renewables within the medium time period. The nation’s plans lean extra towards false options like carbon seize, utilization, and storage (CCUS), which permit for the persevering with monetization of fossil gas deposits. Nevertheless, the goal is to attain 153GW of put in photo voltaic by 2050. Given current tariff modifications, these plans might be accelerated.

Thailand relies upon totally on pure fuel, whether or not domestically produced, piped from Myanmar, or imported as liquified pure fuel (LNG). Nevertheless, with the reemergence of political turmoil in Myanmar, deliveries will doubtless erode as funding in new fields is suspended. Home fuel provides within the Gulf of Thailand are additionally declining, leaving the nation extremely uncovered to USD-denominated LNG markets. The federal government is making plans to diversify its vitality combine, and photo voltaic seems to be essentially the most environment friendly answer, with 15.5GW focused to be operational by 2037 and 76GW by 2050. 

Insulating regional economies by transitioning from fossil fuels

The surprising U.S. coverage modifications have left Southeast Asian companies scrambling for extra diversified markets. The affect of those shifts may expose or create financial weaknesses for every nation. On the similar time, fashionable renewable know-how manufacturing amenities might want to discover new markets for his or her items. By prioritizing the home use of inexperienced know-how already produced inside their borders, Southeast Asian nations can defend investments and jobs. Transitioning from risky, USD-denominated fossil gas and monetary markets to native renewable vitality affords a fast and cost-effective method to protect Southeast Asian economies from future uncertainty.