Trouble ahead for Malaysia’s green future as Trump’s tariffs rattle solar sector

Analysts warn the new levies, coupled with the US’ retreat from climate commitments, could derail renewable energy growth across the region

Reading Time:3 minutes

[Shutterstock] “Shah Alam, Malaysia- 24th June, 2023: Solar panels on a house in Shah Alam, Malaysia. Photo: Shutterstock

Published: 9:03pm, 8 Apr 2025Updated: 3:39pm, 9 Apr 2025

Malaysia’s US$3.8 billion renewable energy sector is bracing for a major setback as US President Donald Trump moves to impose steep tariffs, scale back climate financing and abandon global climate commitments – a “triple whammy” that analysts say could stall Southeast Asia’s clean energy transition.

Malaysia was the world’s third-largest producer of solar photovoltaic (PV) components – the inexpensive, essential parts used in solar panels – in 2022, and was also a major supplier of polysilicon, another critical material in solar manufacturing.

Together with Vietnam, Thailand and Cambodia, these four Southeast Asian nations supplied more than 80 per cent of US solar PV imports in the first half of 2024.

However, the new tariffs on these nations announced by Trump last week – including 24 per cent on Malaysian products – are set to drastically escalate the costs for US importers and intensify pressure on the region’s solar industry.

An array of floating solar panels in Selangor, Malaysia. Photo: AP

Southeast Asia’s major economies have tied their growth strategies to the clean energy transition – but experts warn that the US shift back to fossil fuels could slow their progress.