China firms may not be avoiding US solar duties
WASHINGTON on December 2 unveiled its preliminary decision, stating that certain initially-suspected Chinese solar cell and module manufacturers operating in Cambodia, Malaysia, Thailand and Vietnam may not have been circumventing US duties on solar products made in mainland China.
This is according to a press release issued by the US Department of Commerce, in which the agency recommended an extension of antidumping duties (AD) and countervailing duties (CVD) to solar cell and module imports from specific companies operating in the four aforementioned ASEAN nations.
US President Joe Biden had on June 6 issued a declaration of emergency to impose a 24-month moratorium on new duties on solar cell and module imports from the four ASEAN countries. The move aims to ensure that the US has access to sufficient supply of these items to meet surging electricity demand.
“Commerce examined a complaint alleging that eight solar companies that manufacture solar cells and modules are manufactured the components in the PRC [mainland China], then sending those cells and modules to Cambodia, Malaysia, Thailand, and/or Vietnam for minor processing before being exported to the United States,” the statement said.
“Such actions amount to an effort to evade the existing [AD/CVD] orders on solar cells and modules from the PRC. Today’s preliminary determination underscores Commerce’s commitment to holding the PRC accountable for its trade distorting actions, which undermine American industries.
“Under US law, Commerce may conduct a circumvention inquiry when evidence suggests that merchandise subject to an existing AD/ CVD order is completed or assembled in third countries from parts and
components imported from the country subject to the order.
“AD/CVD orders are designed to provide relief to the US domestic industries when they are facing unfair competition. Circumvention of these duties threatens to undermine American industries, workers, and businesses.
“After a thorough, transparent, and data-driven investigation of eight companies across the four countries, Commerce preliminarily found that four of the eight companies being investigated are attempting to bypass US duties by doing minor processing in one of the Southeast Asian countries before shipping to the United States,” it added.
These four companies were listed as “BYD Hong Kong” in Cambodia; “Canadian Solar” and “Trina” in Thailand; and “Vina Solar” in Vietnam. The other four, marked “not circumventing” are: “New East Solar” in Cambodia; “Hanhwa” and “Jinko” in Malaysia; and “Boviet” in Vietnam.
American Chamber of Commerce in Cambodia president Anthony Galliano
confirmed to The Post on December 4 that the AD/CVD levied on Chinese solar imports have been in place since 2012.
“China has an unquestionable dominant market position on the global supply chain for solar panels and parts,” he said.
“Southeast Asia has supplied 80 per cent of US demand in previous years. In the third quarter of 2022 there was a dramatic spike in imported solar panels – 82 per cent of solar panels imported in [the quarter, ended September 30,] came from the four Southeast Asian countries.
“Vietnam accounted for 41.6 per cent, Malaysia was 20.1 per cent, Thailand was 14.3 per cent and Cambodia was 5.7 per cent.
“Four companies that account for as much as half of the solar cells imported into the United States were found to be avoiding the tariffs on solar products manufactured in China by passing-through in the production process to these four Southeast Asian nations.
“The United States has moved ahead with robust enforcement of US trade laws and to address unfair trade practices, as it tries to revive clean energy manufacturing back to the United States.
“The Inflation Reduction Act passed in August 2022, facilitates tax credits to incentivise and redeploy US panel production back in the United States, to build up domestic capacity, and to eliminate depend on dumped, subsidised, or circumvented imports.
“The United States is 40 per cent of Cambodia’s export market, primarily generated from the garment sector, and it is probably unproductive for the bilateral trade relationship if there are companies using the country to flout trade laws and tariffs.
“This issue is further complicated as the United States pushes swiftly forward to transition its energy industry towards sustainable and renewables.
“Establishing an efficient and competitive US domestic solar manufacturing base is expected to take a few years, as the current solar supply chain is deeply challenged with dependence on foreign energy sources,” Galliano added.
Last year, the Kingdom exported 54,319.83 tonnes of solar panels valued at $273.87 million, an increase of more than 27 per cent in terms of tonnage compared to 2020. A large chunk of the exports, around 53,188.19 tonnes or $256.88 million, was to the US alone, the General Department of Customs and Excise (GDCE) reported.