US Buckles Under Industry Pressure, Suspends Tariff Threat On SE Asia Solar Imports For Two Years

Highlights :

  •  The widely expected announcement follows immense pressure to find a way out to protect projects already underway as well as those planned.
  • The odds that US manufacturing will be able to fill the gap in the next two years remain low, considering the competitive gap between costs with Asia based manufacturers.

The White House said on Monday(06/06/2022) that tariffs on solar panel imports from four Southeast Asian countries would be suspended for two years as part of measures to address “the urgent challenge of a changing climate” — but left China out of the deal. SaurEnergy had reported on the probability of the decision earlier on Monday.

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The United States President Joe Biden is phasing out tariffs on solar panel imports from Cambodia, Malaysia, Thailand, and Vietnam. The White House stated, “To ensure that the United States has enough solar modules to meet its electricity generation demands while domestic production ramps up.”

The Biden Admin has used the  Uighur Forced Labor Prevention Act in December to slow down imports directly from China, alleging that Uighurs and children have been used in manufacture of Polysilicon used by most Chinese firms, from Xinjiang.

The administration has used the Defense Manufacture Act to speed up domestic production of the panels and will enhance demand through federal agency procurements. Building insulation, heat pumps, fuel cells, and platinum group metals are among the domestic products targeted by the DPA directive.

The White House stated, “These initiatives will promote American manufacturing, construction projects, and good-paying jobs – all while lowering energy prices for families, strengthening our grid, and addressing climate change and environmental injustice.”

In 2017, Donald Trump, Biden’s predecessor, put taxes on all solar panel imports. This action primarily affected Chinese goods and was a forerunner to Trump’s bigger trade battle with Beijing, which began in July 2018.

Announcing those tariffs in September 2017, the US International Trade Commission pointed out that as large quantities of solar panels are being imported into the United States that it will seriously harm the domestic manufacturing industry in the future.

As reported by us, the Commerce Department investigation into imports from South East Asia had placed many existing and planned projects at risk, with the threat of retrospective fines, something top industry lobby groups like SEIA had also opposed .

Abigail Ross Hopper, president & chief executive of the Solar Energy Industries Association (SEIA) trade group, praised the announcement, slamming the administration for an investigation initiated at the request of California panel maker Auxin Solar.

Abigail Ross said, “We are convinced that a review of the facts will provide a negative conclusion. The president’s action is a much-needed break from this industry-crushing investigation. The work that our members did to express the urgency caused by recording this action, and to present statistics on the negative consequences, was critical to the effort to raise awareness of the harm.” That might be the SEIA view, but the fact remains that the two year reprieve is driven more by practical considerations of impact on US solar solar capacity than any yet undiscovered truth about the South East Asian manufacturers.

According to a survey conducted by the solar industry’s trade association in April, 83% of respondents had encountered delays or cancellations on their panel orders as a result of the probe.

Biden’s efforts to fulfill a goal outlined in Monday’s statement to increase US solar power capacity to 22.5 gigawatts by 2024 from 7.5 gigawatts when he took office last year are jeopardized by these alleged supply disruptions.
Southeast Asian producers accounted for around three-quarters of US solar panel imports, according to a separate but related White House notification released on Monday.

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