by The U.S. Department of Commerce (DOC) has found that four out of eight Chinese solar companies it investigated “attempt to circumvent U.S. tariffs by performing minor processing in one of the Southeast Asian countries before shipping to the United States “. Here’s what this means for the US solar industry.
December 5 update: One of the four solar companies, Vina Solar, is owned by LONGi Green Energy Technology, headquartered in Xi’An, the world’s largest solar manufacturer.
LONGi said today that it would provide the DOC with evidence that Vina complies with US laws. The solar giant said in a statement to Reuters:
Next, the US Department of Commerce will conduct an on-site inspection over the next few months to verify the authenticity of the investigative information. During this time, we will actively demonstrate that we comply with, and do not circumvent, US trade law.
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The DOC found that the four Chinese companies that attempted to circumvent US tariffs by processing in Southeast Asia are:
- BYD Hong Kong, in Cambodia
- Canadian Solar in Thailand
- Trina in Thailand
- Vina Solar in Vietnam
The DOC results are preliminary and the agency will conduct face-to-face audits over the coming months. The DOC also noted that a ban on products from Cambodia, Thailand and Vietnam will not be implemented:
Companies in these countries are allowed to certify that they do not circumvent this [antidumping duty (AD) and countervailing duty (CVD) orders]in this case, the circumvention determinations do not apply.
The DOC also notes:
In addition, some companies in Malaysia, Thailand and Vietnam did not respond to Commerce’s RFI in this investigation and, in line with long-standing practice, they will be found to circumvent.
As electr As reported in mid-May, the DOC launched an investigation into whether Southeast Asian solar cell makers use Chinese-made parts that would normally be subject to customs duties.
This investigation destabilized the US solar industry, which relies on imports of solar panels to meet growing demand. The majority of the US solar industry then claimed that the DOC investigation would harm the US solar industry and wanted the investigation to be dropped.
On June 6, President Joe Biden waived tariffs on solar panels made in Southeast Asia for 24 months in response to the investigation. He also invoked the Defense Production Act to push manufacturing of US solar panels and other clean energy. In this way, domestic production could be accelerated without interfering with the DOC investigation.
The DOC claimed today that Biden’s presidential proclamation gives US solar importers “ample time to adjust supply chains and ensure sourcing is not from companies found to be violating US laws.”
But Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), saw things differently. She said in a statement:
The only good news here is that Commerce didn’t target all imports from the countries in question. Nonetheless, this decision will jeopardize billions of dollars worth of American clean energy investments and result in a significant loss of well-paying American clean energy jobs. While President Biden has wisely provided a two-year window before the tariffs are implemented, that window is closing fast, and two years simply isn’t enough time to build manufacturing supply chains that will meet US solar demand.
This is a mistake that we will have to deal with in the years to come.
George Hershman, CEO of SOLV Energy, the largest US utility-scale solar installer, was also not pleased with the DOC announcement. He said in an emailed statement:
After years of supply chain challenges and trade disruptions, I remain concerned that the Department of Commerce has chosen a path that could jeopardize the solar industry’s ability to hire more workers and construct the clean energy projects needed to meet our country’s climate goals are.
The upside is that Commerce took a more nuanced approach to exempting a number of manufacturers, rather than issuing a blanket ban on all products from destination countries. While it’s positive that companies can access some of the critical materials we need to deploy clean energy, it’s still true that this ruling will further constrain a challenged supply chain and undermine our ability to deliver on the promise of the Inflation Reduction Act to fulfill.
Photo: Tom Fisk on Pexels.com
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