The Biden administration is considering reducing tariffs on photovoltaic (PV) modules from Mexico, although a final decision has not yet been made. For a long time, U.S. PV deployment has been highly dependent on cheap foreign-made equipment. As a result, the U.S. government has been trying to cultivate a domestic clean energy manufacturing industry while not affecting domestic PV deployment.
During Trump's first term in office, the U.S. imposed tariffs on imported solar cells and modules in early 2018, which Biden extended until February 6, 2026, with the tariff level set at 14 percent for most of next year. While the U.S. exempted Canadian products two years ago, it did not exempt Mexico again after concluding that Mexican exports would severely harm domestic PV manufacturers.
The tariff exemptions currently under consideration would effectively reverse this situation, potentially increasing U.S.' imports of solar products and giving an advantage to Mexico's leading PV module supplier, Maxeon, which is controlled by China's TCL Zhonghuan New Energy Technology Co. and whose plant in Mexico produces 2.5 GW of PV modules annually, or roughly 93 percent of Mexico's total capacity.
However, even if the Biden government exempted tariffs for Mexico's PV modules, the sustainability of the policy is still in doubt. The president-elect Trump has threatened to impose 25 percent tariffs on Mexico to combat illegal immigration and drug offenses. For the PV enterprises going to Mexico, they should always pay attention to the changes of U.S.' tariff policy and make adjustments of the production layout in a timely manner.
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