Treasury Secretary Scott Bessent estimates that the United States has raked in around $100 billion in tariff income so far this year and could pocket $300 billion or more in 2025. The back-and-forth nature of President Trump’s tariffs — along with their implementation on machines needed to create American jobs and on critical building materials like steel and copper — has frustrated many American manufacturers and project developers seeking something closer to projectable price certainty.
It doesn’t look like that’s coming anytime soon for the solar industry or drone companies supporting U.S. utility operations.
This week, the U.S. Commerce Department revealed that it has opened two new national security investigations, one into imported drones and related components and another on polysilicon and its derivatives, key components in solar panels and semiconductors. The Section 232 investigations were initiated on July 1 and could be the basis for new duties on the products.
Commerce has tasked the Bureau of Industry and Security (BIS) with examining the extent to which national security requires imported drones and polysilicon to face additional tariffs, quotas, or unspecified additional measures. Once BIS finalizes its investigation, the Secretary will make a recommendation to President Trump regarding whether either should be added to the list of goods subject to Section 232.
Impact on the American Energy Industry
China accounts for the vast majority of U.S. commercial drone sales. The world’s largest drone manufacturer, Shenzhen-based DJI, sells more than half of all U.S. commercial drones. Legislators have started to crack down on Chinese drone imports over the last few years, citing national security concerns, including a law put into place by President Joe Biden last year that could ultimately ban DJI and competitor Autel from selling new models in the U.S.
The technology, once widely considered too risky for utility deployment outside of specific circumstances, is now more broadly adopted as a safer and speedier alternative to traditional operational protocols. Pacific Gas & Electric Company (PG&E) is utilizing drones to assist with wildfire mitigation. New York State Electric & Gas (NYSEG) and Rochester Gas and Electric (RG&E) are sending them out to inspect thousands of miles of transmission lines. Companies are cropping up to deploy line components and grid-enhancing technologies without ever needing to roll a bucket truck. Startups are cropping up left and right to support the power sector amid a gold rush of unprecedented electric load growth. Last month, President Trump signed an executive order intended to boost the U.S. drone industry.
The United States polysilicon industry is on life support, and China dominates global production of hyper-pure solar-grade polysilicon, owning more than 90% market share. Chinese imports are already subjected to 50% Section 301 tariffs.
The refinement of polysilicon is a particularly tricky process that has stymied even some of the most well-intentioned endeavors, like the one between REC Silicon and its customer Hanwha Qcells. Now that REC Silicon has thrown in the towel on making the critical solar component at both its Butte, Montana, and Moses Lake, Washington plants, Hemlock Semiconductor (HSC) is the only U.S.-owned manufacturer of hyper-pure polysilicon (the other U.S. poly maker, Wacker, which operates in Tennessee, is owned by a German company). Hemlock is one of only five companies worldwide that can produce polysilicon to the purity level needed to serve the semiconductor market. Corning is the majority owner of HSC, which is making polysilicon and wafers out of its facilities in Michigan to support the first-ever domestic solar supply chain in the United States.
China’s polysilicon production practices have been long scrutinized internationally. U.S. Customs and Border Protection (CBP) prohibits approximately 150 companies from importing goods due to their inclusion on the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, which identifies entities suspected of ties to unethical labor practices. The list received its largest single expansion to date early this year- 37 new entities, including globally recognized companies that mine and process critical minerals and others that manufacture inputs for solar modules with polysilicon made in Xinjiang (XUAR), an autonomous region in the People’s Republic of China (PRC).
The UFLPA, signed into law by President Biden in December 2021, mandates that CBP apply a rebuttable presumption that goods that are either mined, produced, or manufactured wholly or in part in the XUAR or produced by entities identified on the UFLPA Entity List are prohibited from importation into the United States, unless the Commissioner of CBP determines, by clear and convincing evidence, that the goods were not produced with forced labor. CBP began enforcing the UFLPA in June 2022. Since then, border patrol has reviewed more than 11,300 shipments (valued at more than $3.67 billion) in an effort to combat the introduction of forced labor into U.S. supply chains.
Other Section 232 Investigations
Since taking office in January, the Trump Administration has opened seven other Section 232 investigations, as neatly tracked by global trade law firm Barnes, Richardson, & Colburn.
1. Copper – Initiated March 10, 2025, with 50% duties expected August 1
2. Timber and Lumber – March 10, 2025
3. Semiconductors and Semiconductor Manufacturing Equipment – April 1, 2025
4. Pharmaceuticals and Pharmaceutical Ingredients – April 1, 2025
5. Trucks – April 22, 2025
6. Processed Critical Minerals and Derivative Products – April 22, 2025
7. Commercial Aircraft and Jet Engines – May 1, 2025
