On February 10th, U.S. President Donald Trump signed an executive order imposing a 25% tariff on all steel and aluminum imports into the United States, emphasizing “no exceptions and no exemptions.”
While directly targeting the steel and aluminum industries, the ripple effects have impacted the global photovoltaic (PV) industry chain.
Each 10% increase in aluminum prices raises PV module costs by approximately 0.5 cents/Watt. China’s PV manufacturing industry relies heavily on aluminum, with a dependency rate of up to 30%, mainly used in brackets, frames, junction boxes, and other components. Although China’s direct steel and aluminum exports to the United States are limited, accounting for only 0.5% of U.S. imports in 2024, disruptions in the global aluminum supply chain could still drive up costs.
Compounding this is the surge in shipping costs, with container shipping index futures recently soaring amidst complex geopolitical risks in the Red Sea and excess shipping capacity. If the steel and aluminum trade war escalates, global logistics costs will further squeeze PV companies’ profit margins. Additionally, China mainly exports aluminum materials to processing countries like Mexico and Vietnam, which then export the products to the United States. Trump’s tariffs may force these processing countries to reduce purchases of Chinese raw materials, leading to increased inventory pressure for Chinese aluminum companies. However, overall global supply remains tight, and prices may stabilize or even rise.
Furthermore, the United States may use tariff policies to promote “de-Chinaization” in PV technology, such as requiring domestically produced steel for PV building integration or restricting the export of perovskite patent technology by Chinese companies. This could force Chinese PV companies to strengthen their core technology independence. The risk of retaliatory measures is also intensifying, as China has imposed tariffs on some U.S. goods and may further restrict exports of tellurium, tungsten, and other PV raw materials. If the Sino-U.S. rivalry escalates, the global PV supply chain could face “regional fragmentation,” driving up installation costs in third-party markets such as Europe and the Middle East. For the U.S. PV industry, domestic PV projects may also be delayed due to price increases in steel and aluminum components. With global PV installations expected to reach 400 gigawatts (GW) in 2025, the impact on the global PV industry will be widespread.
To cope with rising costs, PV companies may accelerate research and development in lightweight technology, such as using carbon fiber or composite materials to replace traditional aluminum frames, promoting technological upgrades. Europe’s Carbon Border Adjustment Mechanism (CBAM) is also driving the PV industry to recycle aluminum, with leading Chinese companies establishing PV module recycling systems to reduce dependence on primary raw materials through recycled aluminum. PV companies are turning to high-efficiency battery technologies such as n-type TOPCon and HJT, which require higher material purity and may stimulate demand for new alloys, indirectly weakening the impact of traditional steel and aluminum tariffs.
Trump’s presidency has been like a boulder thrown into the pond of globalization, with ripples touching every aspect of the PV industry. This game is both a pressure test for the security of China’s PV supply chain and a strategic opportunity for technological upgrades and global layout.
