As the United States tightens its grip on trade loopholes used by Chinese solar panel makers in Southeast Asia, uncertainty looms over the future of these manufacturers. The US Department of Commerce has initiated anti-dumping and anti-subsidy investigations into crystalline silicon photovoltaic cells from Cambodia, Malaysia, Thailand, and Vietnam, triggering concerns among Chinese firms operating in the region.

Allegations have been made that Chinese manufacturers have been shifting production to Southeast Asian countries to circumvent tariffs imposed by the US. With investigations now underway, Chinese firms are faced with challenges and are forced to consider alternative markets, as the European Union and other Western countries could potentially follow suit.

The expiration of a temporary exemption from anti-dumping and countervailing duties of 200 percent on solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam further exacerbates the situation. Reports suggest that many Chinese manufacturers have halted production under the pretext of facility upgrades or maintenance, while others have furloughed their workers.

Analysts stress the importance for Chinese companies to find alternative markets in the absence of the US. Terence Chong Tai-leung, an associate professor of economics at the Chinese University of Hong Kong, suggests capturing the demand in the Middle East or other major developing countries.

Major Chinese manufacturers operating in Southeast Asia, such as Longi and Trina Solar, have already taken steps to adjust their production in response to the potential mass production shutdown. Longi, for instance, stated that its production adjustments were part of plant upgrades without providing further details. Trina Solar, on the other hand, claimed that its plants in Thailand and Vietnam were shut down for routine maintenance. These companies are not new to policy changes and market volatility and expressed confidence in adjusting their plans accordingly.

The Chinese solar panel industry has invested heavily in Southeast Asia due to its low production costs, proximity to China, and exemptions from US tariffs. Over 20 Chinese photovoltaic firms have established production bases in the region. However, with the US cracking down on the trade workaround, Chinese manufacturers face the dilemma of either shutting down factories or keeping them as a backup.

In response to the shifting dynamics, several Chinese manufacturers, including Trina Solar, are already ramping up construction of new plants in the US. Jinko Solar, based in Shanghai, has built plants in the US with a total output of 2 gigawatts and is seeking US government subsidies in line with the Biden administration's focus on supporting domestically produced solar products.

Observers suggest that the US will continue suppressing Chinese companies, potentially finding excuses across various industries to target them. There are concerns that Europe may also impose similar tariffs on Chinese new energy products. Liu Yiyang, a deputy director with the China Photovoltaic Industry Association, believes that the US moves against exports from Southeast Asia are an attempt to close a perceived "loophole" in its containment of China's new energy sectors.

As the US and the European Union detect China's overcapacity issues in the new energy industry, investigations and countermeasures have been implemented. Chinese electric vehicles and lithium batteries have been the primary focus of these actions. Analysts recommend that Chinese exporters explore markets without tariffs, sell at lower prices with government subsidies, and leverage diplomatic means. The Middle East has already become a target market, with companies like Trina Solar expanding their presence in countries such as the United Arab Emirates.

The mounting uncertainties faced by Chinese solar panel manufacturers in Southeast Asia highlight the challenges ahead. As the trade landscape continues to evolve, these companies are forced to adapt and explore new avenues while navigating the shifting dynamics of the global solar industry.