Chinese solar makers evaded US tariffs, investigation finds

Chinese solar makers evaded US tariffs, investigation finds

WASHINGTON — U.S. officials have determined that four of the eight major Chinese solar companies investigated in recent months attempted to evade tariffs by shipping products to the United States via countries in Asia. Southeast, in a trade case that pitted clean energy proponents against domestic solar panel makers. .

The decision applies to the Thai operations of Canadian Solar and Trina Solar, as well as BYD Cambodia and Vina Solar Vietnam, according to a ruling posted on the Commerce Ministry’s website Friday morning.

The investigation, initiated at the request of a small California company called Auxin Solar, was aimed at determining whether Chinese companies were trying to circumvent US tariffs on cheap solar panels imported from China. In recent years, Chinese solar companies have significantly expanded their manufacturing presence in Southeast Asian countries that do not face the same tariffs.

The business case hinges on whether Chinese companies are actually using these Southeast Asian countries as an important manufacturing site, or whether they are only making minor changes to products that are largely made in China in an attempt to circumvent US trade rules.

Other companies also under investigation, namely New East Solar Cambodia, Hanwha Q CELLS Malaysia, Jinko Solar Malaysia and the Vietnam operations of Boviet Solar, were found not to violate US trade rules.

Companies that import solar products into the U.S. — including major U.S. installers, as well as U.S. branches of Chinese solar companies — have protested the investigation, saying it prevented them from importing enough material to respond. to the growing demand for clean energy solutions. They have lobbied the Biden administration and lawmakers to argue that the trade case will prevent the United States from meeting its ambitious climate goals. President Biden has pledged to reduce greenhouse gas emissions by 50%, below 2005 levels, by the end of the decade.

In 2020, 89% of solar modules used in the United States were imported, with Southeast Asian countries accounting for the bulk of shipments.

Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, which opposed the investigation, said the group was “obviously disappointed that the trade chose to overstep its legal authority”, arguing that manufacturers of cells and modules significantly transformed their products in Southeast Asia. .

“This decision will block billions of dollars of American investment in clean energy and result in a significant loss of well-paying American clean energy jobs,” she said, adding: “It is a mistake we will have to deal with for the next few years.”

The survey results also appear likely to spur Republicans and domestic industry to criticize the Biden administration’s failure to crack down on China for its unfair trade behavior.

The Biden administration decided in June to suspend all tariffs resulting from the investigation, regardless of the decision, for a period of two years to ensure that the United States has sufficient supplies of solar panels to power the energy transition and mitigate climate change.

The Biden administration has set a goal of producing 100% of the nation’s electricity from carbon-free sources such as solar, wind or nuclear by 2035, up from just 40% in 2020, a goal which could require more than doubling the annual rate. of solar installations.

In a statement Friday, the Coalition for a Prosperous America, a group that promotes American manufacturing, called on the Biden administration to withdraw its declaration of emergency that neutralized the inquiry’s result, and instead apply the American trade laws.

Mr Biden’s statement “gives Chinese manufacturers a free pass to illegally circumvent” US trade laws for 24 months and protects them from retroactive duties, the coalition said.

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