Senators Plead With Biden for Quick End to Solar-Trade Probe

Source: By Jennifer A Dlouhy, Bloomberg • Posted: Tuesday, May 3, 2022

Investigation threatens acute damage to U.S. solar, group says Tariff supporters say U.S. must build solar supply chain

Inside a solar panel factory in Vietnam.
Inside a solar panel factory in Vietnam. Photographer: Yen Duong/Bloomberg

Nearly two dozen senators on Monday implored President Joe Biden to swiftly advance a trade probe that they said was already causing “massive disruption” in the U.S. solar industry.

The investigation into whether Chinese companies are circumventing decade-old tariffs by assembling solar cells and modules in Southeast Asia “will severely harm” American businesses and workers “as long as it continues,” the 22 senators said in a letter to Biden.

The group, led by Democrats Jacky Rosen of Nevada, Martin Heinrich of New Mexico and Kyrsten Sinema of Arizona, asked the Biden administration to quickly make a preliminary determination on the matter, rather than waiting until an Aug. 30 deadline to issue its initial findings. That could limit the domestic impact from the investigation and neuter the threat of retroactive tariffs on panels imported from Cambodia, Malaysia, Thailand and Vietnam, which represent about 80% of imported supply in the U.S.

For now, the mere existence of the probe has chilled development, with a survey by an anti-tariff industry group showing 83% of solar companies have reported canceled or delayed panels. New tariffs could mean “massive price hikes for U.S. utility customers,” delays in deploying clean energy and halted projects, the senators said.

The American manufacturer that successfully persuaded the U.S. Commerce Department to open the probe, San Jose, California-based Auxin Solar Inc., argues the U.S. must enforce its trade laws to combat “pervasive backdoor dumping” and rebuild the American solar supply chain. Tariff supporters argue that it’s essential for the U.S. to counter China’s dominance in solar manufacturing and not be cowed by what they call exaggerated industry claims of domestic disruption.

“A thorough investigation” is necessary, said Auxin Solar Chief Executive Officer Mamun Rashid.

“While a more expeditious proceeding would be valuable to us, we are not going to tell Commerce how to conduct its investigation or to pressure it to cut corners,” Rashid said in an emailed statement. The circumvention statute “requires fact finding and a reasoned decision-making process.”

Read More: Solar Projects in U.S. Slam to a Halt Amid Risk of 239% Tariffs

The investigation now underway is apolitical by design, following parameters developed under a 92-year-old U.S. trade law. White House and Commerce Department officials have stressed the probe is a quasi-judicial process meant to be independent.

“Commerce currently levies duties on solar cells and panels produced in China to negate unfair subsidies and dumping in the U.S. market,” Commerce Secretary Gina Raimondo said in response to an earlier letter from Rosen. “Commerce is required by statute to investigate a claim that companies operating in other countries in the region are trying to circumvent those duties.”

The latest push from senators follows a plea by California Governor Gavin Newsom for “immediate action” to resolve the probe “and restore certainty to the market.” In a letter last week to Raimondo, Newsom said the probe is hindering California’s work to combat climate change and threatens the state’s ability to maintain energy reliability as some power plants are retired.

“We need to accelerate, not slow down, the deployment of clean energy and storage projects,” Newsom wrote.