US preliminarily finds some companies circumventing solar tariffs

The US Department of Commerce on Friday published its preliminary determination in a solar circumvention case, finding that certain companies in four Southeast Asian countries are dodging US duties on Chinese solar cells and modules.

Commerce is looking into whether solar products coming to the US from Cambodia, Malaysia, Thailand and Vietnam and using components made in China are circumventing the US antidumping and countervailing duties on solar cells and modules from China.

The circumvention investigation was launched earlier this year at the request of US solar manufacturer Auxin Solar Inc and paralysed the solar supply chain. In June, US president Joe Biden moved to relieve the US supply chain, announcing a 24-month bridge for tariff-free imports from these four Southeast Asian countries.

“While President Biden was wise to provide a two-year window before the tariff implementation, that window is quickly closing, and two years is simply not enough time to establish manufacturing supply chains that will meet US solar demand,” the Solar Energy Industries Association’s (SEIA) head Abigail Ross Hopper said on Friday.

SEIA expressed disappointment with the preliminary decision, describing it as a mistake.

Commerce said that after an investigation of eight companies across the four countries, it preliminarily found that four of them are attempting to bypass US duties by performing minor processing in one of the four countries before exporting to the US. It added it is making a “country-wide” circumvention finding, meaning that companies in these countries will be allowed to certify that they are not circumventing US tariffs so that the circumvention findings do not apply to them. A final decision is expected on May 1, 2023.

Below is a table provided by the department of its preliminary findings:

Commenting on the decision, the American Clean Power Association’s (ACP) interim chief executive JC Sandberg said: “American solar companies are making critical 2024 procurement decisions now and today’s decision casts greater uncertainty about the future of the solar industry in the US that could lead to higher electricity bills.”

Gregory Wetstone, president and chief executive of the American Council on Renewable Energy (ACORE), said “With today’s decision, the Commerce Department appears to be doubling down on constricting solar availability, and imposing massive new red tape with certification requirements that could further chill the industry and thwart the administration's clean energy objectives.”

“The good news is that we look forward to the development of an enhanced domestic solar manufacturing base over the next few years, spurred in part by the incentives in the Inflation Reduction Act. But that will not happen overnight,” Wetstone also commented.

Choose your newsletter by Renewables Now. Join for free!