The Biden administration decided on Monday to investigate whether solar products imported from four Asian countries illegally bypass existing duties placed on China, setting off criticism from green energy groups that say the imposition of tariffs will harm deployment of solar technology and thwart efforts to reduce greenhouse gas emissions.
The Commerce Department will open a circumvention inquiry to determine if solar cells and modules brought in from Thailand, Vietnam, Cambodia, and Malaysia violate anti-dumping and countervailing duties against Chinese solar products. California-based Auxin Solar filed the petition last month, arguing the imports violate so-called “AD/CVD” tariffs and are injurious to domestic cell and module manufacturers.
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Auxin’s petition is much like a similar but unsuccessful petition by an anonymous group of U.S. solar manufacturers filed last year that maintained the degree to which cells and modules are assembled in the targeted third countries is “minor or insignificant,” a standard laid out in the Tariff Act of 1930, and that manufacturers are functionally acting as pass-throughs for Chinese products that would otherwise be subject to duties.
Green energy groups filed multiple comments with the department leading up to Monday’s decision and made a range of arguments, including that Auxin failed to demonstrate that operations in the targeted countries are minor or insignificant.
The trade groups have also stressed that opening an investigation, notwithstanding the introduction of new duties on the sources of 80% of the industry’s imports, would be deleterious to the industry.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said Commerce’s decision to move forward competes with President Joe Biden’s goal of reaching 100% carbon pollution-free electricity by 2035 and will scare away investment, as well as delay existing projects from coming online.
“There’s just way too much uncertainty that has been created to allow companies to continue to send panels here when they don’t know what those panels are going to cost, because they don’t know what the tariffs are going to be,” Hopper told the Washington Examiner.
Biden has attempted to strike a balance between supporting solar firms engaged in the panel assembly and construction side of the industry and supporting those in manufacturing, and there has been a tension between the tariff-light approach that companies engaged in the former support and his “Made in America” manufacturing policy.
For example, Biden extended Trump-era solar tariffs in February but left in place an exemption for bifacial panels.
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As for the new investigation, Hopper contrasted Commerce’s decision with the new White House budget, which proposes to increase spending for green energy, and said the fact that it generates uncertainty is “basic Econ 101.”
“Our companies are rational economic actors, like other companies in this country, and so they are going to assess risk, accept cost, assess opportunity,” Hopper said, “and when there is this much risk in the market, they’re not going to invest their capital.”