Why is Chinese manufacturing migrating globally in all directions, becoming a nomadic factory of globalization? U.S. tariffs and decrees are the key drivers. Currently, China's photovoltaic module factories are working overtime in Ethiopia to ship goods, rushing to squeeze into the U.S. market before the Section 232 tariffs take effect this December. No other industry can more clearly reveal the fully armed U.S. trade policy toolkit than photovoltaics. Following the migration route of China's photovoltaic factories provides a most comprehensive lesson on U.S. trade law.
The global migration route of Chinese factories has spanned 15 years. In November 2011, the United States simultaneously launched anti-dumping (AD) and countervailing duty (CVD) investigations into the photovoltaic industry. The tariff order a year later resulted in combined AD/CVD rates as high as 254.66%. This decree was the prelude to the massive relocation of China's photovoltaic industry. Initially, however, it was just a slight tremor, and no one foresaw two consecutive events. The first was the overwhelming and massive development of China's photovoltaic industry, and the second was the continuous stacking of trade measures, which pushed Chinese photovoltaic factories to seek new footholds globally.
As these trade investigations and tariffs were implemented, a small portion of China's photovoltaic industry began to move to Southeast Asia sequentially. These scattered factories were more symbolic. However, the crack between the mountain and the ground appeared when the United States launched four waves of tariff tsunamis in 2018. Among China's exports to the United States, approximately USD 370 billion were subjected to additional tariffs, accounting for about two-thirds of the total exports to the U.S. These Section 301 measures, justified by industrial policy and intellectual property, and Section 201 measures, justified by harm to U.S. industries, were superimposed on the existing trade tariffs on photovoltaics. This caused the now fully-fledged Chinese photovoltaic industry to move to Southeast Asia on a large scale. The four countries, including Vietnam and Malaysia, were the most favored destinations. The U.S. Department of Commerce obviously noticed this. The real showdown began in third countries.
In 2022, the United States launched an anti-circumvention (AC) investigation into the four Southeast Asian countries. This was not an isolated new tariff, but a pursuit of whether the previous AD/CVD measures against China were being circumvented. Solar cells and modules produced in third countries using Chinese wafers and other components, and then re-exported to the United States, were the focus of the U.S. Department of Commerce's review. The anti-circumvention investigation taking place in third countries further pushed the upstream supply chain of China's photovoltaic industry to extend overseas.
At this point, the combination of U.S. measures becomes evident.
In 2012, the AD/CVD against China significantly raised the threshold for direct exports of Chinese photovoltaics to the United States.
The U.S. tariffs in 2018, based on Section 201 industry injury and Section 301 policy challenges, raised import costs from different directions, further promoting the layout of China's photovoltaic industry in Southeast Asia. Section 301 was like directional light, raising the cost of Chinese photovoltaic exports. Section 201 measures, on the other hand, were like diffuse reflection, covering multiple sources of origin, making it impossible for products from third countries to avoid tariffs when entering the United States.
The AC anti-circumvention investigation, however, grasped the upstream of Chinese module factories. According to the final ruling in 2023, for modules using Chinese-made wafers, manufactured in the four countries and exported to the United States, especially regarding six key components, at least four must be produced outside of China for the modules to be considered rooted locally. These six components are silver paste, aluminum frames, glass, backsheets, EVA film, and junction boxes. This method of compressing the aorta caused the supply chain to diffuse in all directions. The tributary vessels, instead, became thicker. The upstream of photovoltaics, such as aluminum frames, silver paste, and backsheets, successively landed in Southeast Asia. Even photovoltaic glass began to move; Flat Glass Group built two thousand-ton-class photovoltaic glass kilns in Hai Phong, northern Vietnam. In this stage, what migrated outward was mainly downstream products such as cells, modules, and some supporting links. However, the most upstream polysilicon and wafers, as well as processing equipment manufacturing, remained in China. The addresses of the factories were changing, but the center of gravity of industrial capability did not necessarily move in sync.
Just as the four-year Section 201 tariffs were expiring, the United States extended them for another four years. Around the same time, the United States introduced a brand-new tool: the Uyghur Forced Labor Prevention Act (UFLPA). It was signed at the end of 2021 and took effect in June 2022. This is a product ban act named after the use of forced labor in the production process. Goods may be detained upon arrival at U.S. ports, and enterprises need to prove that their products do not violate the UFLPA. This evidence collection is lengthy and complex. From June to October 2022, over a thousand batches of photovoltaic equipment were detained at U.S. ports, with almost none released within months. Even if photovoltaic modules drifted at sea for half a year, they might not necessarily pass U.S. customs.
Even so, none of these could stop China's photovoltaics from entering the U.S. market in an overwhelming manner through the four Southeast Asian countries. It brought about two obvious results: the rapid development of the U.S. photovoltaic industry and the rapid maturation of the photovoltaic supply chain in the four Southeast Asian countries. Tariffs did not reduce the photovoltaic trade between China and the United States; instead, the trade routes became longer.
The United States decided to strike at the third-country links. In May 2024, the U.S. Department of Commerce launched dual anti-dumping and countervailing duty (AD/CVD) investigations into the nearly mature supply chains of the four Southeast Asian countries. This was the same playbook the United States used against China 12 years ago, now applied to third countries. When the final ruling landed in April 2025, the countervailing and anti-dumping duty rates for Cambodian enterprises exceeded 3500%. Cambodia's trade channel to the United States was directly cut off. These extremely high rates do not apply to all enterprises, but they are sufficient to show the intensity of the new round of trade barriers. The simultaneous suppression of the aorta and tributary vessels expressed the United States' urgent desire to cut off the "detour channel" for Chinese photovoltaics to bypass to the United States. By this point, the factories in the four Southeast Asian countries had basically collapsed. In Bac Giang, Vietnam, LONGi's base had only one of its nine production lines still operating, and hundreds of workers were laid off. JinkoSolar's factory in Penang, Malaysia, halted production. The four countries' module exports to the United States fell from USD 12.2 billion in 2023 to USD 1.3 billion in 2025.
Another portion of the capacity moved to Indonesia. Hengdian Dongci holds 3GW of cell capacity in Indonesia, Trina Solar jointly built a 1GW integrated cell and module factory with a local Indonesian enterprise, and LONGi also launched a 1.4GW joint venture factory. The U.S. Department of Commerce followed up immediately, launching new AD/CVD investigations against India, Indonesia, and Laos in August 2025. Wherever the nomadic factories go, the investigation files follow.
The United States does not only have external suppression, but also internal attraction. In 2022, it released the Inflation Reduction Act (IRA), providing a 45X manufacturing tax credit for qualifying domestic photovoltaic manufacturing in the United States: 7 cents per watt for modules and 4 cents per watt for cells. The combined subsidies have reached the actual domestic selling price. In China, one watt of photovoltaic module can only be sold for about CNY 0.7, while in the United States, it can reach CNY 2.1 or even higher. For qualifying photovoltaic power station projects, enterprises can also apply for the Investment Tax Credit (ITC). These are tangible policy incentives. Thus, like birds attracted by the light, China's photovoltaic leaders—Canadian Solar, JA Solar, Trina Solar, LONGi, and JinkoSolar—have successively laid out factories in the United States. U.S. factories have very low efficiency and high production costs. However, relying on government subsidies, enterprises can still obtain good profits. This is a market that no business player can refuse, nor should refuse. China's photovoltaic factories have arrived at their ultimate destination: the United States.
When Trump took office in 2025, he continued to change the trajectory of this curve. The "One Big Beautiful Bill Act" (OBBBA) in July tightened the tax credit period for photovoltaic projects. This shortened the long-term expectations for photovoltaics in the United States. More importantly, it launched a targeted attack on the Chinese identity of U.S. factories. The FEOC (Foreign Entity of Concern) rule, known as the restriction on investment by foreign entities, was almost tailor-made for China. When a single specific foreign entity holds 25% of the shares, it will result in the inability to obtain U.S. subsidies. Under this policy environment, Chinese enterprises have successively adjusted their assets and equity structures in the United States. JinkoSolar sold 75.1% of the equity of its Florida factory to a private equity fund. Trina Solar sold its Texas factory to a U.S. company, keeping only 17.4% of the shares. Similarly, LONGi also significantly reduced its shares in the Ohio joint venture factory. Policies change repeatedly, and the heavy assets of Chinese enterprises' factories have become burdens. Selling the factories first and keeping a small amount of shares is the only choice. Even so, compared to the fiercely and brutally competitive market in China, the U.S. market remains profitable.
Beyond China, the United States, and the four Southeast Asian countries, China's nomadic factories have begun a new journey. The four Southeast Asian countries have already been subjected to AD/CVD tariffs, and the factories have lost their meaning. Chinese photovoltaic enterprises decided to rush to Africa, build factories there, and start anew on the way to the United States.
The barren desert quickly took on the appearance of factories. In Ethiopia, Origin Solar, which started locally, built a 4.2GW cell factory, with Canadian Solar standing behind it. In Nigeria, Chinese enterprises signed a construction agreement for a 600MW complete module production line. In Egypt, EliTe Solar's 5GW factory will be put into production in early 2026. What is most intriguing is that the components come from the supply chain that China had previously formed in Southeast Asia. China's module exports to Africa grew by 62% in the first nine months of 2025, and by another 119% in the first quarter of 2026. With the relocation of Chinese factories, Africa's weight in the global photovoltaic landscape is steadily rising.
The United States naturally cannot ignore those tropical plants growing rapidly in African factories, and the encirclement battle begins again. In July 2025, the United States launched an investigation under Section 232, on the grounds of harming national security, into globally imported polysilicon and derived photovoltaic products. The biggest advantage of Section 232 is that the president can directly issue a proclamation without lengthy congressional approval. In February 2026, the Section 201 tariffs, which had been running for eight years, expired, and the new Section 232 measures took over.
This gives African photovoltaic factories an urgent mission: to mass-produce photovoltaic modules before the Section 232 measures take effect on December 4, 2026, so as to quickly pass U.S. customs. African factories are in a race against time. The plot of Southeast Asia is being replayed here. Ethiopia, which took the lead in building factories, received the first yellow card. In May 2026, eight U.S. manufacturers jointly petitioned, naming the factories in Ethiopia for heavily using Chinese photovoltaic components. The U.S. Department of Commerce then officially filed an anti-circumvention AC investigation. In the previous half year, U.S. imports from Ethiopia surged from zero to USD 277 million. Like the abandoned factories in Southeast Asia a few years ago, Ethiopia will also lose its value. The factories here must accelerate production to extract the last value of the workshops before the anti-circumvention investigation ruling. And Ethiopia's fate may soon befall those African brother countries like Nigeria and Kenya. Their factories will also become invalid one after another.
Where will be the next mobile foothold for China's photovoltaic industry? Tariffs are easy to add but hard to remove, and factories are gained and then lost. China's photovoltaic factories are already prepared for the possibility of moving at any time. Where can these nomadic factories take root for the long term?
About the Author: Lin Xueping, General Manager of Beijing Lianxun Power Consulting Co., Ltd., Visiting Researcher at the China Quality Development Research Institute of Shanghai Jiao Tong University, and author of "Grand Going Global" and "Supply Chain Offense and Defense".