Imagine waking up to find your thriving industry, one that promised jobs and innovation, crumbling overnight. That’s the story of Cambodia’s solar sector, which soared to dizzying heights before plummeting due to a seismic shift in U.S. trade policy. In 2023, Cambodia’s solar exports to the U.S. hit a staggering $2.4 billion, rivaling its garment industry as a cornerstone of economic growth. But by mid-2025, those exports dwindled to a mere $4.4 million, a collapse triggered by U.S. tariffs reaching as high as 3,521%. How did this happen, and what does it mean for Cambodia’s future?
From Boom to Bust: The Solar Industry’s Meteoric Rise and Fall
Cambodia’s solar industry was once a beacon of promise. Between 2018 and 2022, factories sprang up across the country, fueled by global demand for renewable energy and a favorable U.S. trade environment. These facilities employed thousands, offering wages that outshone those in traditional sectors like textiles. The industry’s rapid growth positioned Cambodia as a key player in the global solar supply chain, with exports to the U.S. alone reaching $2.4 billion at their peak.
But the good times didn’t last. The expiration of a two-year U.S. tariff waiver in June 2024 marked the beginning of the end. The subsequent imposition of countervailing duties and anti-dumping tariffs—some as high as 3,403% for Cambodian producers—sent shockwaves through the industry. Factories that once buzzed with activity now stand silent, and workers who dreamed of a brighter future are left scrambling.
Why the U.S. Imposed Such Steep Tariffs
The U.S. tariffs weren’t conjured out of thin air. They stemmed from a year-long investigation by the U.S. Department of Commerce, prompted by American solar manufacturers like Hanwha Qcells and First Solar. These companies argued that Southeast Asian producers, including those in Cambodia, were flooding the U.S. market with unfairly cheap products, often backed by Chinese subsidies. The accusation? Dumping—selling goods below production costs to undercut competitors.
The findings confirm what we’ve long known: foreign solar companies have been undercutting U.S. manufacturers with subsidized products.
– U.S. industry lawyer
Cambodian producers faced the harshest penalties, largely because many chose not to cooperate with the U.S. investigation. This led to tariffs based on adverse inferences, resulting in rates as high as 3,521% for companies like Jintek Photovoltaic Technology and Solar Long PV-Tech. By contrast, Malaysia faced duties as low as 34.4%, while Vietnam and Thailand saw rates of 395.9% and 375.2%, respectively.
But here’s where it gets murky. Cambodian manufacturers insist they weren’t transshipping Chinese goods, as the U.S. claimed. One manager I came across in my research passionately defended their operations, noting that their factories employed over 1,000 workers and were closely monitored by local authorities. “We invested heavily in our facilities,” he said. “The idea that we’re just a front for Chinese products feels like a punch in the gut.”
The Human Cost: Jobs Lost and Dreams Deferred
The tariffs didn’t just hit corporate bottom lines; they upended lives. Factories that once employed hundreds now operate with skeleton crews—or not at all. Jintek Photovoltaic, a major player, shuttered its doors entirely. Solar Long PV-Tech, which supplied giants like BYD America, saw its manager flee the country as operations ground to a halt. Hounen Solar, once a bustling hub, now employs just a handful of workers.
For workers, the fallout has been devastating. Many were drawn to the solar industry by the promise of higher wages and cutting-edge technology. “It wasn’t just a job,” one former employee shared. “It felt like we were part of something bigger, something modern.” Now, many have returned to lower-paying jobs in garments or, like one former Jintek worker, turned to selling fruit on the streets of Phnom Penh.
- Job Losses: Thousands of workers laid off as factories closed.
- Wage Impact: Many returned to lower-paying sectors like textiles.
- Economic Ripple: Reduced local spending as incomes plummeted.
The human toll is hard to overstate. I can’t help but wonder: how do you rebuild hope when an entire industry vanishes practically overnight?
Adapting to Survive: A Few Holdouts Pivot
Not every company has given up. A few, like Venus Energy and VCOM Power System, have shifted to producing thin-film panels, which face a lower 19% tariff. These panels are pricier to manufacture, but they’ve allowed these firms to cling to viability—for now. “We’re down to two companies from five,” a VCOM representative noted. “If tariffs climb higher, we’re done for.”
This pivot highlights a broader truth: adaptability is key in a volatile global market. But it’s a tough road. Thin-film panels require different production processes, and the cost-benefit equation is precarious. For these companies, survival hinges on navigating a complex web of trade policies while keeping costs manageable.
The Bigger Picture: Global Trade and Renewable Goals
The tariffs’ impact extends beyond Cambodia’s borders. The U.S. imported $2.9 billion in solar products from Southeast Asia last year, with Cambodia, Malaysia, Thailand, and Vietnam supplying nearly 80% of modules. With imports now curtailed, U.S. developers face higher costs and supply shortages, potentially slowing renewable energy deployment. Critics argue this undermines global climate goals, as affordable solar is critical to transitioning from fossil fuels.
High tariffs could stall U.S. solar projects, delaying progress toward a low-carbon future.
– Renewable energy advocate
Yet, U.S. manufacturers see it differently. They argue that protecting domestic production is essential to building a resilient solar industry. With the Inflation Reduction Act offering generous subsidies, U.S. solar capacity is projected to hit 13 GW for cells and 65 GW for modules by late 2025. But can domestic production scale fast enough to fill the gap left by Southeast Asian imports?
| Country | Tariff Rate | Impact on Exports |
| Cambodia | Up to 3,521% | Near-total collapse |
| Malaysia | 34.4% | Moderate decline |
| Thailand | 375.2% | Significant reduction |
| Vietnam | 395.9% | Sharp drop |
The data paints a stark picture. Cambodia’s near-total export collapse stands out, raising questions about whether such punitive measures were necessary or if they’ve backfired by destabilizing a key supplier.
Cambodia’s Path Forward: Diversification and Resilience
So, what’s next for Cambodia? Some experts suggest diversifying export markets to regions like the Middle East or Africa, where demand for renewables is growing. Cambodia’s low labor costs and lack of strict capital controls make it an attractive hub for foreign investment, despite the tariff setback. But rebuilding an industry from the ashes isn’t easy.
I’ve always believed that resilience is born from adversity. Cambodia’s solar sector could pivot to new markets or technologies, but it’ll require government support and private innovation. For now, the focus is on survival—whether through niche products like thin-film panels or by finding new buyers less affected by U.S. policies.
A Balancing Act: Protectionism vs. Progress
The U.S.-Cambodia tariff saga is a microcosm of a larger global struggle: balancing trade protectionism with the urgent need for renewable energy. While U.S. manufacturers celebrate the tariffs as a win, the ripple effects—job losses, supply chain disruptions, and potential delays in climate progress—tell a more complex story.
Perhaps the most sobering lesson is how quickly fortunes can change in a globalized economy. Cambodia’s solar industry, once a shining example of growth, now serves as a cautionary tale. As trade policies evolve, the challenge will be finding a path that supports both local economies and global sustainability.
What do you think? Can Cambodia’s solar industry bounce back, or will these tariffs reshape the global renewable landscape for good? The answers may lie in how nations navigate the delicate dance of trade and innovation.
