On June 1, 2025, the Department of Commerce initiated an investigation into imports of Polysilicon under Section 232 of the Trade Expansion Act, teeing up a more permanent, durable, and legally defensible import duty on the critical solar component. On July 16, 2025, the Bureau of Industry and Security (BIS) published a notice requesting comments on the investigation in docket BIS-2025-0028.  This triggers a 270-day timeline for the Secretary of Commerce to submit a report to the President recommending actions to mitigate any national security threats. Comments are due no later than August 6, 2025. 

What is Polysilicon? 

Polysilicon, and its derivatives (other, distinct products that derive mainly from Polysilicon) is a key base component in creating modern solar panels and is created from Silicon, one of the most abundant elements on the planet. Polysilicon and its derivatives have several different uses during the Solar manufacturing process.  While these processes are not all streamlined, most begin with Polysilicon.  Just like Steel is critical for the construction of ships, airplanes, cars, or buildings, Polysilicon is critical for the manufacture of most solar modules. 

Doesn’t Solar already have significant import controls? 

Yes. Unlike many specific goods and general tariffs recently targeted by the Whitehouse for additional tariffs and import controls, components of solar panels have long been subject to various import controls. This started all the way back in 2012, when the United States imposed antidumping and countervailing duties in 2012. Antidumping duties are put in place to protect domestic industries from a foreign producer shocking the market with for a product offered much lower than market price in the country. Similarly, countervailing duties are used to negate foreign government subsidies that artificially decrease manufacturing costs for foreign suppliers. In 2014 and 2015 that tariff was expanded, and in 2018, a 30% tariff was imposed on all major solar product exporters to the United States by the first Trump Administration. That tariff was extended in 2022 by the Biden Administration and sits today at just under 15%.  The Biden administration also increased the section 301 tariffs on Chinese Solar Panels to 50% in May of 2024, and the general 20% fentanyl tariff on Chinese goods imposed by the second Trump administration increased tariffs on Chinese Solar.  These actions likely attempt to combat Chinese dominance of the material. While numbers vary, China has achieved nearly an 80% market share in Polysilicon production, and some sources indicate that number is almost 93%. 

Similarly, clean energy incentives for Solar, including the Inflation Reduction Act as amended by the One Big Beautiful Bill, focused on limiting tax credit eligibility for project with components from “Foreign Entities of Concern.”   

Why is a Section 232 Investigation different than previous import controls?

Unlike some of the more recent tariff actions, based in a novel interpretation of the International Emergency Economic Powers Act (IEEPA) (50 U.S.C.  § 1701 et seq.) which has faced legal roadblocks in the US Court of International Trade, Section 232 tariff actions are a longstanding and well-established mechanism of placing tariffs on goods for national security purposes.  Unlike the IEEPA tariffs, for which the authority is purportedly immediate, the Section 232 process begins with an investigation by the Department of Commerce. Once the Department of Commerce completes the investigation, a report is prepared with recommendations to the President, who can then take action. The most prominent usage of these tariffs has been the duties imposed on Steel and Aluminum in 2018, which both the Biden Administration and the Trump Administration have continued to expand and enforce. 

Lessons Learned from Past Section 232 Investigations

1. Products with 232 Tariffs are exempt from certain tariffs.

Some importers have seen Section 232 tariffs on Steel and Aluminum products as a benefit for their product in this period of tariff uncertainty, because many of the recent tariff actions exempt products subject to Section 232 tariffs. However, this may be a short-lived gain, as the Section 232 tariffs on Steel and Aluminum have endured and expanded over the past seven years, while the more recent tariff actions have proven to be potentially less durable, especially if new trade agreements are reached.

1. Section 232 Investigations increase compliance costs

The current section 232 tariffs on Steel and Aluminum derivatives apply to the entire amount of the good, unless the importer can accurately demonstrate what percentage of the good derives from the underlying tariff product.  This can quickly complicate matters for affected firms, who must take actions in the form of manufacturer affidavits, inventory tracking, and supply chain investigation to accurately report and determine the percentage of the product that should be affected by the tariff.  Misrepresenting this number can result in penalties, but failure to take advantage of the reduction is costly as well. 

Derivative Determinations are Key

One of the most important lessons learned from the Steel and Aluminum tariffs is that the list of which derivatives are included is critical for determining the tariff’s overall effect on importers.  For steel, for example, an initial list of derivatives was included, but a process was created through the BIS for including and removing various derivatives for cause. Potentially affected importers should be prepared to actively engage in this process to advocate for addition or subtraction of derivatives as necessary for their industry. 

Next steps and likely future outcomes

• Comments on the Section 232 Investigation due August 6, 2025. 
• Presidential Determination on Section 232 Tariff shortly thereafter. 
• Initial derivative list should be analyzed to determine whether the product qualifies. 
• Potential future BIS process for adding and subtracting derivatives from any potential tariff established in the future. 

Michael Best and Michael Best Strategies’ trade teams provide services on trade compliance, advocacy, and regular intelligence on tariff actions, challenges, and opportunities for our clients. Please contact Orrie Walsvik or Sarah Helton for further assistance.