Clean Energy Tariffs
Solar Exporters Evaded Duties on Chinese Components, US Rules
Four Asia-based solar component companies are evading U.S. antidumping duties on photovoltaic cells by processing Chinese units subject to the penalties in a minor way before they are imported for use on American projects, the U.S. Commerce Dept. said Dec. 2 in a preliminary finding. It will make a final determination on May 1.
“Today’s preliminary determination underscores Commerce’s commitment to holding the People’s Republic of China accountable for its trade distorting actions,” the agency said in a ruling that sustains a petition for the probe by U.S. manufacturer Auxin Solar. The ruling "largely validated and confirmed Auxin's allegations of Chinese cheating," firm CEO Mamun Rashid said in a statement.
That early 2021 petition—and fear of major tariffs on imports of solar components not yet manufactured domestically in large enough quantities to meet demand—had sent that clean energy sector's construction into a nosedive. But under a proclamation issued by President Biden in June, duties will not be collected on any solar modules and cells imported from those four countries until June 2024.
U.S. and overseas manufacturers announced last month new investments to boost domestic production through the Inflation Reduction Act, but a solar sector coalition of 240 firms also pressed the department against the duties.
One company from Cambodia, two from Thailand and one from Vietnam were found guilty in the preliminary finding, with some companies in Malaysia, Thailand and Vietnam not responding to the agency’s request for information.
Commerce is making a country-wide circumvention finding for the four Asian countries, which provide 80% of U.S. solar imports, but not a ban—so all solar cell exporters based in those nations must certify they are not avoiding the duties.
Four other companies that were investigated were found not to be evading the duties, so no action will be taken against them as long as their production process and supply chain does not change, the agency ruling said.
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Despite the enforcement hiatus, solar project trade groups expressed concern.
"Today’s decision will limit our ability to fortify our supply chain and reflects the dramatic shift from ‘free trade’ policies to protectionism in both parties," Gregory Wetstone, president and CEO of the American Council on Renewable Energy, said in a statement. "American consumers, and the effort to protect our climate, are unfortunately caught in the middle,”
Added Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, in a statement: “The only good news here is that Commerce didn’t target all imports from the subject countries."
But she said the ruling still "will strand billions of dollars of clean energy investments and result in the significant loss of American, clean energy jobs. Two years is simply not enough time to establish manufacturing supply chains that will meet U.S. solar demand."
The Coalition for a Prosperous America said Biden should immediately withdraw the delay, saying it gives Chinese manufacturers a “free pass” to illegally circumvent duties.
The companies found to be circumventing duties are Cambodia’s BYD Hong Kong, Canadian Solar and Trina in Thailand and Vina Solar in Vietnam. Four firms found not to be in violation are New East Solar from Cambodia, Hanwha and Jinko from Malaysia and Boviet from Vietnam.
