On September 4, 2026, Reuters reported that a polysilicon plant in Charleston, Tennessee, is at risk of closure – and the very policy driving away its customers is the new Trump administration tariff tailor‑made to protect it.
The plant belongs to German chemical giant Wacker Chemie, representing an investment of $2.5 billion and employing about 600 workers. It is one of only two U.S. polysilicon producers.
The episode traces back to an executive order signed by Trump on August 6. Under Section 232 of the Trade Expansion Act of 1962, the U.S. imposed a 15% tariff on imported polysilicon derivatives and set minimum import prices: $21 per kilogram for polysilicon, and $100 per kilogram for silicon ingots and wafers, effective December 4.
The White House stated that the move was intended to protect the domestic U.S. polysilicon industry against China’s dominance in this sector. The policy goal was clear and the target seemed well defined, but the problem lay in its implementation details.
The policy has a fatal structural flaw: it treats all imported products uniformly. Regardless of whether the silicon wafers you import contain U.S.-made polysilicon or Chinese‑made polysilicon, they are all subject to the same 15% tariff and the same price floor.
As a result, Wacker’s customers did the math. U.S.-produced polysilicon already costs nearly four times as much as imported material. With the new policy in place, continuing to use Wacker’s U.S. raw material would make costs prohibitively high. On the other hand, directly buying finished wafers from overseas – with the same tariff and the same price floor – would be much cheaper. Customers unhesitatingly chose the latter.
Reuters, citing informed sources, reported that this policy directly scared away the last two customers of Wacker’s Tennessee plant. The factory now faces a potential shutdown.
Following the news, Wacker’s share price closed down 2.6% that day. The company issued a statement saying it currently has no plans to close the Charleston plant, but acknowledged that the current tariff provisions cannot effectively support U.S.-made polysilicon, and said it is actively negotiating with the government.
More notably, just days before the policy was announced, Wacker’s CEO had already warned investors that if trade protection does not deliver tangible benefits, the company could face an overcapacity situation of “one plant too many.”
Industry research firm Wood Mackenzie’s analysts pointed out that, under the current structure, the Section 232 tariffs are not expected to boost demand for U.S. polysilicon.
Even the pro‑tariff lobbying group Coalition for a Prosperous America expressed concern. Its spokesperson stated that the implementation rules should reward purchases of U.S.-made polysilicon; otherwise, there is a risk of handing the solar and semiconductor supply chains over to China.
The U.S. now has only two polysilicon producers left: Wacker Chemie and Hemlock Semiconductor. If Wacker’s Tennessee plant closes, only one will remain.
Berenberg analysts expect Wacker will most likely close one of its three plants, with more information possibly disclosed at the London investor conference on September 17.
This is not the first time U.S. trade policy has faced such controversy. Reuters noted that earlier steel and aluminum tariffs had produced similar effects on U.S. manufacturing. The current polysilicon tariff row has once again raised concerns about how policy design can avoid the trap of “protecting domestic industry” turning into “hurting domestic companies.”
