Trump administration plans polysilicon price floors and tariffs to curb China's sway

The US Commerce Department opened a Section 232 national security investigation into polysilicon and related products on July 1, 2025, followed by a public comment notice on July 16. Section 232 is the same statute the first Trump administration used in 2018 to impose tariffs on steel and aluminum, giving the president wide latitude to restrict imports judged to threaten national security. Commerce is expected to deliver its findings around May 2026. The timetable now points to a presidential decision in August 2026. Alongside the probe, the administration has been developing a price-floor framework for critical minerals. Proposals surfaced in January 2026, with Vice President JD Vance expanding on the concept in February 2026. Under the mechanism, adjustable tariffs would activate to maintain a minimum trading price. If global polysilicon prices fall below a set threshold—an outcome officials associate with low-priced supply from Chinese producers—tariffs would automatically rise to keep the effective US price above the floor. Polysilicon is an ultra-purified silicon-based material used in two major supply chains. Solar-grade polysilicon is made into wafers for photovoltaic panels. Electronic-grade polysilicon, refined to even higher purity, is used in semiconductors. China supplies most of the world's polysilicon, while US capacity is limited. Key domestic producers include Hemlock Semiconductor in Michigan and Wacker Chemie's plant in Tennessee. REC Silicon, which operated in Washington State, has faced significant operational challenges. The policy push also ties into the Inflation Reduction Act of 2022, which committed billions to support domestic solar manufacturing and clean-energy deployment. The administration is positioning polysilicon measures as a way to make the IRA's domestic manufacturing goals more achievable. Price floors and tariffs would likely increase input costs for US solar panel makers and semiconductor manufacturers. Higher polysilicon prices can translate into more expensive panels, longer payback periods for installations, and weaker economics for projects that are viable today. For US producers such as Hemlock, a price floor could provide revenue certainty and support the case for capacity expansion. The Section 232 outcome is not limited to a single option. The president could choose broad tariffs, targeted tariffs, quotas, or a blended approach that includes exemptions, with different effects across the solar and semiconductor value chains.