The Commerce Department said in a new report that solar imports sourced from several Asian countries are skirting existing U.S. tariffs on China, a finding that paves the way for new tariffs on imports.
Commerce issued a preliminary determination Friday in an anti-circumvention investigation into solar imports from Thailand, Malaysia, Vietnam, and Cambodia. Auxin Solar, a California-based manufacturer of solar modules, petitioned the department in February to investigate whether Chinese companies operating in those countries are circumventing existing anti-dumping and countervailing duties on Chinese solar products.
A MAJOR SNAG IN THE PLANS TO BOOST US SOLAR INDUSTRY
At issue is whether work performed on the solar cell and module products is “minor or insignificant,” a charge leveled in Auxin’s petition to assert circumvention, or whether substantial manufacturing is taking place in those countries.
Commerce looked into the operations of two solar companies in each country, determining that four companies are circumventing tariffs and four are not.
“What we’re trying to do is just provide relief against unfair trade practices. This is not an import ban,” a senior administration official told reporters this morning, adding that Commerce’s determination also serves as a deterrent to other companies in other countries.
A large segment of the solar industry, including developers whose projects rely on imported cells and modules and their trade groups, fiercely oppose the investigation, arguing the mere possibility of new tariffs disrupted orders and threatened to derail President Joe Biden’s climate change agenda.
Opponents of the investigation already obtained some measure of relief. Biden used his trade powers to declare an emergency under the Tariff Act of 1930 to create a 24-month “bridge” designed to exempt solar imports from new anti-dumping and countervailing duties, or AD/CVD.
Solar manufacturers accused Biden of unduly interfering in the Commerce Department’s investigation with the emergency declaration rather than letting it run its course, while other segments of the industry opposed to the inquiry praised Biden for delivering more certainty to the industry.
Michael Stumo, CEO of Coalition for a Prosperous America, which represents domestic producers and supports Commerce’s investigation, urged the administration to drop the solar emergency declaration immediately in light of the department’s determination on Friday.
“It is unconscionable that the White House wants to continue to give Chinese manufacturers a pass for illegally violating U.S. trade law to the detriment of American companies and American workers,” Stumo said.
The industry is split over the merit of tariffs but aligns on the need for more federal incentives to grow the solar sector, including the manufacturing of solar components.
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Congress delivered it with the Democrats’ Inflation Reduction Act, which authorized hundreds of billions in incentives and subsidies to expand renewable energy and other clean energy technologies.
The law provides tax credits to solar manufacturers and project developers to build new projects and to households to install solar at home.
