KUALA LUMPUR, Dec. 18 (Xinhua) -- Increased tariffs and protectionist policies by the United States against solar photovoltaic (PV) manufacturers in Southeast Asia, including Malaysia, will ultimately harm itself, as PV manufacturers will seek new markets in response, according to a Malaysia business group.

These challenges will also spur manufacturers to explore higher-value manufacturing, cost-efficiency and the adoption of new technology, the Malaysian Photovoltaic Industry Association (MPIA) told Xinhua in a recent exclusive interview.

"To mitigate the impact of the tariffs, companies may consider diversifying their markets by expanding their focus on regions such as Europe and ASEAN (the Association of Southeast Asian Nations), thereby reducing reliance on U.S. exports. Additionally, investing in higher-value components and research and development will be essential for maintaining competitiveness in a rapidly changing market," MPIA said.

"While these tariffs present significant challenges, they also signal a transformative period for solar manufacturing. The industry is adapting by becoming more geographically diverse, which may ultimately lead to a more resilient global solar supply chain," MPIA said.

The United States recently announced increased tariffs on Malaysia, Cambodia, Vietnam, and Thailand, accusing Chinese solar panel manufacturers operating in these Southeast Asian countries of driving down product prices.

According to MPIA, in the short term, the tariffs, of up to 21.31 percent, will cause disruptions and are likely to reduce the competitiveness of Malaysian solar cell exports in the U.S. market, potentially leading to a decline in demand and market share.

"The situation is particularly challenging because many solar PV manufacturers in Malaysia were primarily established to serve international markets, including the U.S. The established supply chains that have made Malaysia a major hub for solar product manufacturing may face disruptions as companies navigate these new trade barriers," MPIA said.

"However, it's important to note that this shift has been ongoing since the previous U.S. administration, with many companies already planning or implementing strategies to adapt to changing trade policies," MPIA said, adding that PV companies need to work closely with the Malaysian government to navigate trade negotiations and explore supportive policies that can bolster the industry. Enditem

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