The US Department of Commerce (DOC) found that four of the eight Chinese solar companies it investigated “attempted to evade US tariffs by performing minor processing in a Southeast Asian country before shipping to the US”. What this means for the US solar industry.
December 5 update: One of the four solar companies, Vina Solar is owned by Xi’An-based LONGi Green Energy Technology, the world’s largest solar manufacturing company.
LONGi said today it will present evidence to the DOC that Vina has complied with US law. The solar giant said in a statement to Reuters:
The US Department of Commerce will then conduct an on-site inspection over the next several months to verify the authenticity of the investigation data. During this period, we will actively provide evidence that we comply with, and do not evade, US trade laws.
Electrek will continue to follow this story.
Four Chinese companies trying to avoid US tariffs by processing DOC in Southeast Asia are:
- BYD in Hong Kong, Cambodia
- Canadian Solar in Thailand
- Trina in Thailand
- Vina Solar, in Vietnam
The DOC’s findings are preliminary, and the agency will conduct in-person inspections in the coming months. The DOC also noted that the ban will not apply to products from Cambodia, Thailand and Vietnam:
Companies in these countries will be allowed to certify that they are not circumventing the law [antidumping duty (AD) and countervailing duty (CVD) orders]in which case the findings of avoidance will not apply.
DOC also notes:
In addition, some companies in Malaysia, Thailand and Vietnam did not respond to Commerce’s request for information in this investigation, and in line with long-standing practice, evasion will be detected.
whom Electrek reported in mid-May that the DOC had launched an investigation into whether Southeast Asian solar cell manufacturers were using Chinese-made parts that would normally be subject to the tariff.
The investigation has destabilized the U.S. solar industry, which relies on imports of solar modules to meet growing demand. Most of the US solar industry then argued that the DOC investigation would harm the US solar industry and asked that the investigation be dismissed.
On June 6, President Joe Biden waived 24 months of tariffs on solar panels manufactured in Southeast Asia in response to the investigation. He also invoked the Defense Production Act to boost solar panel and other clean energy production in the US. Thus, local production can be accelerated without interfering with DOC research.
The DOC argued today that Biden’s presidential announcement gives US solar importers “sufficient time to regulate their supply chains and ensure that they do not source from companies found to be in violation of US law.”
But Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), didn’t see it that way. He said in his statement:
The only good news here is that Commerce did not target all imports from the subject countries. Nevertheless, the decision would halt billions of dollars in American clean energy investments and result in the significant loss of good-paying American clean energy jobs. While President Biden was wise to provide a two-year window before tariffs are implemented, that window is closing fast, and two years is not enough time to build manufacturing supply chains that will meet U.S. solar demand.
This is a mistake we will have to deal with over the next few years.
George Hershman, CEO of SOLV Energy, the largest U.S. utility-scale solar installer, was also not happy with the DOC’s announcement. He said in an e-mail statement:
After years of supply chain problems and trade disruptions, I am concerned that the Commerce Department has chosen a path that threatens the solar industry’s ability to hire more workers and build the clean energy projects needed to meet our nation’s climate goals.
On the upside, Commerce has taken a nuanced approach to exempting a number of producers, rather than banning all products from target countries. While it’s positive that companies can gain access to some of the critical materials we need to implement clean energy, it’s still true that this decision will further restrict the challenged supply chain and reduce our ability to deliver on the promise of the De-Inflation Act.
Photo: Tom Fisk on Pexels.com
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