Chinese solar firms face duties for dodging tariffs
The United States will impose new duties on some major Chinese solar panel makers after a months-long investigation found they were trying to dodge tariffs by finishing their products in four Southeast Asian countries, trade officials say.
The preliminary decision was bad news for US solar project developers that rely on cheap imports to fuel their growth, but fell short of their worst fears that Washington would impose new tariffs to cover all solar shipments from the region, instead of just those from specific companies.
President Joe Biden has set a goal to decarbonise the nation’s power sector – the source of around a quarter of national greenhouse gas emissions – by 2035, something that will require rapid deployment of new solar, wind and other clean energy projects.
The Commerce Department found units of BYD, Trina Solar, Longi Green Energy Technology and Canadian Solar were circumventing existing tariffs on Chinese solar cells and panels that have been in place for a decade.
If finalised next year, the determination means those companies will be subject to duties on the products they make in Malaysia, Cambodia, Thailand and Vietnam – countries that account for about 80 per cent of US panel supplies.
Those companies and others would face the same duty rates the US already assessed on their Chinese-made products, officials said, noting that most of those rates were below 35 per cent. The duties will not kick in until June 2024 thanks to a two-year waiver from Biden earlier this year.
The announcement was welcomed by Auxin Solar, a small US solar panel maker that requested the Commerce Department investigation. The tiny US solar manufacturing industry has often sought trade protections to stem the flow of cheap Asian goods they say make their products uncompetitive.
“Commerce’s investigations have largely validated and confirmed Auxin’s allegations of Chinese cheating,” Auxin chief executive Mamun Rashid said.
Producers including New East Solar, Hanwha Q CELLS, Jinko Solar and Boviet Solar were found not to be dodging the tariffs, the department said. Other firms will have the ability to pursue a certification process to show they are not circumventing tariffs. A final decision is expected in May.
“The only good news here is that Commerce didn’t target all imports from the subject countries,” Abigail Ross Hopper, president of solar trade group the Solar Energy Industries Association said. “This is a mistake we will have to deal with for the next several years.”
Buyers of solar panels for both large utility projects and residential rooftops say new tariffs will worsen what is already a difficult market for accessing solar energy equipment.
The industry has faced project delays for the past two years due to pandemic-related supply disruptions and a ban on goods made in China’s Xinjiang region over forced labour concerns.