Biden Administration Considers Mexico from Solar Tariffs

The Biden administration is considering a last-minute policy shift that would exempt Mexico from tariffs on imported solar equipment, a move that could primarily benefit Maxeon Solar Technologies Ltd. The decision is currently under review by senior officials as they approach the final weeks of President Joe Biden’s term. Sources familiar with the deliberations, who spoke on condition of anonymity, said the exemption is still under consideration, with no final decision made yet.

Broader Trade Discussions Amid Clean Energy Challenges

This potential tariff exemption arises during ongoing trade negotiations with Mexico and the Biden administration ‘s broader energy challenge. The administration seeks to balance domestic clean energy manufacturing growth with affordable solar equipment imports. For years, the U.S. solar industry has relied on inexpensive foreign-made equipment to meet demand. High tariffs could stifle solar power deployment and raise concerns.

The tariffs target imported crystalline silicon solar cells and modules, introduced by President Trump in early 2018. President Biden extended these tariffs through February 6, 2026, with a 14% rate for most of 2024. The U.S. exempted Canadian products from the tariffs two years ago. However, it has not extended the same relief to Mexico, fearing harm to domestic manufacturers from increased imports.

Maxeon Solar Technologies Could Gain Competitive Advantage

The exemption being considered could reverse this stance, potentially increasing the flow of solar imports from Mexico and benefiting Maxeon, the dominant solar module supplier in the country. Maxeon, which is majority-owned by China’s TCL Zhonghuan Renewable Energy Technology Co. Ltd., produces around 2.5 gigawatts of solar modules annually at its Mexican factories—about 93% of the country’s total capacity, according to BloombergNEF.

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If the exemption goes through, Maxeon’s Mexico-made panels could gain a significant competitive edge in the U.S. market, where demand for solar energy continues to grow. However, the exemption would not resolve other hurdles the company faces, including a slow U.S. solar market. In September, Maxeon reported that its shipments from Mexico were delayed at the border as customs officials assessed their compliance with trade restrictions related to human rights concerns in China. In November, Maxeon announced a major restructuring, focusing exclusively on the U.S. market and divesting from other global operations.

Domestic Manufacturers Express Concerns

Opponents of the proposed exemption, including U.S. solar manufacturers, argue that it could unfairly disadvantage American companies by boosting the market share of a foreign, China-backed competitor. Many industry advocates warn that the exemption would put domestic producers at a disadvantage, as they would have to contend with cheaper imports from Maxeon’s Mexican plants.

Representatives from the White House, the U.S. Trade Representative, and Maxeon did not respond to requests for comment.

Maxeon’s U.S. Expansion Plans Continue Despite Challenges

Maxeon announced plans to build a solar module assembly plant in Albuquerque, New Mexico. However, the company scaled back its original 3-gigawatt plan. It now expects to begin manufacturing at a 2-gigawatt facility in early 2026. New Mexico Democrats, including Senator Martin Heinrich, support the project and its future role.

Uncertainty Over Duration of Potential Exemption

It’s unclear whether the exemption for Mexican-made solar equipment will be permanent. President-elect Trump plans harsher trade measures. He proposed a 25% tariff on both Canada and Mexico to address illegal immigration and fentanyl trafficking. This raises concerns about the future of tariff relief for Mexico.

U.S. Manufacturers Push for Increased Import Quota

The U.S. Trade Representative is receiving requests from solar manufacturers to increase the tariff-free import quota for solar cells. Currently at 12.5 gigawatts, the cap will reset in February, but imports may exceed this limit. Manufacturers relying on imports are lobbying for a higher quota, warning that U.S. producers could face penalties. This increase is crucial as the U.S. expands its domestic solar production.

As trade policy Biden administration discussions continue, the outcome will likely have significant implications for the future of U.S. solar manufacturing and international trade in clean energy technologies.