Solar Industry ‘Frozen’ as Biden Administration Investigates China

Old_Joe

Following are edited excerpts from a New York Times article:

Around the country, solar companies are delaying projects, scrambling for supplies, shutting down construction sites and warning that tens of billions of dollars — and tens of thousands of jobs — are at risk.

The tumult is the result of a decision by the Commerce Department to investigate whether Chinese companies are circumventing U.S. tariffs by moving components for solar panels through four Southeast Asian countries.

Though officials have not yet found any evidence of trade violations, the threat of retroactive tariffs has effectively stopped imports of crystalline silicon panels and components from Cambodia, Malaysia, Thailand, and Vietnam. These four countries provide 82 percent of the most popular type of solar modules used in the United States.

The Commerce Department initiated its investigation on March 25 after Auxin Solar, a small solar panel manufacturer based in California, filed a petition requesting an inquiry into whether China was circumventing rules intended to prevent state-subsidized solar parts from flooding the U.S. market.

Until now, the Commerce Department had signaled that because the parts coming from China were substantially transformed by the companies in Southeast Asia, those components were not subject to the tariffs.

But if the Commerce Department finds that the panels coming from Southeast Asia included Chinese-made parts that should have been subject to tariffs, panels sold in the United States after the start of the investigation could carry steep duties. And the threat of those additional costs has caused shipments of solar panels to grind to a halt.

The process for evaluating trade disputes is a complex system designed to prevent political interference. Commerce Secretary Gina Raimondo this week said that her department was legally obliged to pursue the issue.

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